Correlation Between COSCIENS Biopharma and Stepstone

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

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

Diversification Opportunities for COSCIENS Biopharma and Stepstone

-0.76

Correlation Coefficient

COSCIENS Biopharma  Stepstone

Pay attention - limited upside

The 3 months correlation between COSCIENS and Stepstone is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding COSCIENS Biopharma and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and COSCIENS Biopharma 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 COSCIENS Biopharma 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 COSCIENS Biopharma i.e., COSCIENS Biopharma and Stepstone go up and down completely randomly.

Pair Corralation between COSCIENS Biopharma and Stepstone

Given the investment horizon of 90 days COSCIENS Biopharma is expected to under-perform the Stepstone. In addition to that, COSCIENS Biopharma is 2.17 times more volatile than Stepstone Group. It trades about -0.13 of its total potential returns per unit of risk. Stepstone Group is currently generating about -0.04 per unit of volatility. If you would invest  6,452  in Stepstone Group on September 19, 2024 and sell it today you would lose (88.00) from holding Stepstone Group or give up 1.36% of portfolio value over 90 days.

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

COSCIENS Biopharma  vs.  Stepstone Group

COSCIENS Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSCIENS Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Stepstone Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stepstone Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Stepstone reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COSCIENS Biopharma and Stepstone

The main advantage of trading using opposite COSCIENS Biopharma and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCIENS Biopharma 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 COSCIENS Biopharma 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.