Correlation Between PRAXAIR and Stepstone
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By analyzing existing cross correlation between PRAXAIR INC 355 and Stepstone Group, you can compare the effects of market volatilities on PRAXAIR and Stepstone 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 PRAXAIR with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRAXAIR and Stepstone.
Diversification Opportunities for PRAXAIR and Stepstone
Good diversification
The 3 months correlation between PRAXAIR and Stepstone is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PRAXAIR INC 355 and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and PRAXAIR 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 PRAXAIR INC 355 are associated (or correlated) with Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of PRAXAIR i.e., PRAXAIR and Stepstone go up and down completely randomly.
Pair Corralation between PRAXAIR and Stepstone
Assuming the 90 days trading horizon PRAXAIR INC 355 is expected to under-perform the Stepstone. But the bond apears to be less risky and, when comparing its historical volatility, PRAXAIR INC 355 is 2.29 times less risky than Stepstone. The bond trades about -0.04 of its potential returns per unit of risk. The Stepstone Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,901 in Stepstone Group on September 3, 2024 and sell it today you would earn a total of 688.00 from holding Stepstone Group or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.0% |
| Values | Daily Returns |
PRAXAIR INC 355 vs. Stepstone Group
Performance |
| Timeline |
| PRAXAIR INC 355 |
| Stepstone Group |
PRAXAIR and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PRAXAIR and Stepstone
The main advantage of trading using opposite PRAXAIR and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRAXAIR position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| PRAXAIR vs. The Travelers Companies | PRAXAIR vs. GE Aerospace | PRAXAIR vs. Walmart | PRAXAIR vs. Pfizer Inc |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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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