Correlation Between BCE and Stepstone
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Stepstone Group, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Stepstone.
Diversification Opportunities for BCE and Stepstone
Very good diversification
The 3 months correlation between BCE and Stepstone is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and BCE 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 BCE Inc 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 BCE i.e., BCE and Stepstone go up and down completely randomly.
Pair Corralation between BCE and Stepstone
Considering the 90-day investment horizon BCE Inc is expected to generate 0.62 times more return on investment than Stepstone. However, BCE Inc is 1.61 times less risky than Stepstone. It trades about 0.06 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.02 per unit of risk. If you would invest 2,189 in BCE Inc on December 28, 2024 and sell it today you would earn a total of 127.00 from holding BCE Inc or generate 5.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BCE Inc vs. Stepstone Group
Performance |
Timeline |
BCE Inc |
Stepstone Group |
BCE and Stepstone Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BCE and Stepstone
The main advantage of trading using opposite BCE and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
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.
Other Complementary Tools
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |