Correlation Between Stepstone and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Stepstone and Via Renewables 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 Via Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Via Renewables, you can compare the effects of market volatilities on Stepstone and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Via Renewables.
Diversification Opportunities for Stepstone and Via Renewables
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stepstone and Via is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Stepstone i.e., Stepstone and Via Renewables go up and down completely randomly.
Pair Corralation between Stepstone and Via Renewables
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.72 times more return on investment than Via Renewables. However, Stepstone Group is 1.39 times less risky than Via Renewables. It trades about 0.09 of its potential returns per unit of risk. Via Renewables is currently generating about 0.03 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Via Renewables
Performance |
| Timeline |
| Stepstone Group |
| Via Renewables |
Stepstone and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Via Renewables
The main advantage of trading using opposite Stepstone and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |