Correlation Between Stepstone and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Stepstone and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and TotalEnergies SE ADR, you can compare the effects of market volatilities on Stepstone and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and TotalEnergies.
Diversification Opportunities for Stepstone and TotalEnergies
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepstone and TotalEnergies is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and TotalEnergies SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE ADR 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE ADR has no effect on the direction of Stepstone i.e., Stepstone and TotalEnergies go up and down completely randomly.
Pair Corralation between Stepstone and TotalEnergies
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.59 times more return on investment than TotalEnergies. However, Stepstone is 1.59 times more volatile than TotalEnergies SE ADR. It trades about 0.09 of its potential returns per unit of risk. TotalEnergies SE ADR is currently generating about 0.02 per unit of risk. If you would invest 2,702 in Stepstone Group on September 2, 2024 and sell it today you would earn a total of 3,887 from holding Stepstone Group or generate 143.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. TotalEnergies SE ADR
Performance |
| Timeline |
| Stepstone Group |
| TotalEnergies SE ADR |
Stepstone and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and TotalEnergies
The main advantage of trading using opposite Stepstone and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| TotalEnergies vs. Shell PLC ADR | TotalEnergies vs. Equinor ASA ADR | TotalEnergies vs. Petrleo Brasileiro SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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