Correlation Between Stepstone and Telephone
Can any of the company-specific risk be diversified away by investing in both Stepstone and Telephone at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stepstone and Telephone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Telephone and Data, you can compare the effects of market volatilities on Stepstone and Telephone and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Stepstone with a short position of Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Telephone.
Diversification Opportunities for Stepstone and Telephone
Very poor diversification
The 3 months correlation between Stepstone and Telephone is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data and Stepstone is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Stepstone Group are associated (or correlated) with Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of Stepstone i.e., Stepstone and Telephone go up and down completely randomly.
Pair Corralation between Stepstone and Telephone
Given the investment horizon of 90 days Stepstone is expected to generate 1.89 times less return on investment than Telephone. But when comparing it to its historical volatility, Stepstone Group is 2.57 times less risky than Telephone. It trades about 0.09 of its potential returns per unit of risk. Telephone and Data is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 947.00 in Telephone and Data on September 2, 2024 and sell it today you would earn a total of 2,471 from holding Telephone and Data or generate 260.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Telephone and Data
Performance |
| Timeline |
| Stepstone Group |
| Telephone and Data |
Stepstone and Telephone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Telephone
The main advantage of trading using opposite Stepstone and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Telephone can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Telephone will offset losses from the drop in Telephone's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Telephone vs. Telephone and Data | Telephone vs. Shenandoah Telecommunications Co | Telephone vs. WideOpenWest | Telephone vs. ATN International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |