Correlation Between GEN Restaurant and Stepstone

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

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

Diversification Opportunities for GEN Restaurant and Stepstone

0.15

Correlation Coefficient

GEN Restaurant  Stepstone

Average diversification

The 3 months correlation between GEN and Stepstone is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and Stepstone go up and down completely randomly.

Pair Corralation between GEN Restaurant and Stepstone

Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Stepstone. In addition to that, GEN Restaurant is 1.57 times more volatile than Stepstone Group. It trades about -0.07 of its total potential returns per unit of risk. Stepstone Group is currently generating about -0.02 per unit of volatility. If you would invest  5,833  in Stepstone Group on December 28, 2024 and sell it today you would lose (300.00) from holding Stepstone Group or give up 5.14% of portfolio value over 90 days.

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

GEN Restaurant Group,  vs.  Stepstone Group

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Stepstone Group

Risk-Adjusted Performance

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 GEN Restaurant and Stepstone

The main advantage of trading using opposite GEN Restaurant and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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 GEN Restaurant Group, 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 Anywhere module to track or share privately all of your investments from the convenience of any device.