Correlation Between Ballys Corp and Stepstone

Can any of the company-specific risk be diversified away by investing in both Ballys Corp and Stepstone 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 Ballys Corp and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ballys Corp and Stepstone Group, you can compare the effects of market volatilities on Ballys Corp 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 Ballys Corp with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballys Corp and Stepstone.

Diversification Opportunities for Ballys Corp and Stepstone

0.39

Correlation Coefficient

Ballys Corp  Stepstone

Weak diversification

The 3 months correlation between Ballys and Stepstone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ballys Corp and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and Ballys Corp 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 Ballys Corp 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 Ballys Corp i.e., Ballys Corp and Stepstone go up and down completely randomly.

Pair Corralation between Ballys Corp and Stepstone

Given the investment horizon of 90 days Ballys Corp is expected to generate 5.67 times less return on investment than Stepstone. In addition to that, Ballys Corp is 1.54 times more volatile than Stepstone Group. It trades about 0.01 of its total potential returns per unit of risk. Stepstone Group is currently generating about 0.09 per unit of volatility. If you would invest  2,678  in Stepstone Group on October 10, 2024 and sell it today you would earn a total of  3,220  from holding Stepstone Group or generate 120.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ballys Corp  vs.  Stepstone Group

Ballys Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ballys Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Ballys Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Stepstone Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stepstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Stepstone is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ballys Corp and Stepstone

The main advantage of trading using opposite Ballys Corp and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballys Corp 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.

The idea behind Ballys Corp and Stepstone Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.