Correlation Between Stepstone and SOUTHWESTERN
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By analyzing existing cross correlation between Stepstone Group and SOUTHWESTERN ELEC PWR, you can compare the effects of market volatilities on Stepstone and SOUTHWESTERN 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 SOUTHWESTERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and SOUTHWESTERN.
Diversification Opportunities for Stepstone and SOUTHWESTERN
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stepstone and SOUTHWESTERN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and SOUTHWESTERN ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHWESTERN ELEC PWR 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 SOUTHWESTERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHWESTERN ELEC PWR has no effect on the direction of Stepstone i.e., Stepstone and SOUTHWESTERN go up and down completely randomly.
Pair Corralation between Stepstone and SOUTHWESTERN
Given the investment horizon of 90 days Stepstone Group is expected to under-perform the SOUTHWESTERN. In addition to that, Stepstone is 1.29 times more volatile than SOUTHWESTERN ELEC PWR. It trades about -0.16 of its total potential returns per unit of risk. SOUTHWESTERN ELEC PWR is currently generating about -0.14 per unit of volatility. If you would invest 9,659 in SOUTHWESTERN ELEC PWR on September 15, 2024 and sell it today you would lose (314.00) from holding SOUTHWESTERN ELEC PWR or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. SOUTHWESTERN ELEC PWR
Performance |
| Timeline |
| Stepstone Group |
| SOUTHWESTERN ELEC PWR |
Stepstone and SOUTHWESTERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and SOUTHWESTERN
The main advantage of trading using opposite Stepstone and SOUTHWESTERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, SOUTHWESTERN 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 SOUTHWESTERN will offset losses from the drop in SOUTHWESTERN's long position.| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
| SOUTHWESTERN vs. Insteel Industries | SOUTHWESTERN vs. Stepstone Group | SOUTHWESTERN vs. Nasdaq Inc | SOUTHWESTERN vs. Lion One Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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