Correlation Between Stepstone and Ballys Corp

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

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

Diversification Opportunities for Stepstone and Ballys Corp

-0.05

Correlation Coefficient

Stepstone  Ballys Corp

Good diversification

The 3 months correlation between Stepstone and Ballys is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Ballys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballys Corp and Stepstone 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 Stepstone Group are associated (or correlated) with Ballys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballys Corp has no effect on the direction of Stepstone i.e., Stepstone and Ballys Corp go up and down completely randomly.

Pair Corralation between Stepstone and Ballys Corp

Given the investment horizon of 90 days Stepstone Group is expected to generate 8.94 times more return on investment than Ballys Corp. However, Stepstone is 8.94 times more volatile than Ballys Corp. It trades about 0.18 of its potential returns per unit of risk. Ballys Corp is currently generating about 0.42 per unit of risk. If you would invest  5,952  in Stepstone Group on October 24, 2024 and sell it today you would earn a total of  418.00  from holding Stepstone Group or generate 7.02% return on investment over 90 days.

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

Stepstone Group  vs.  Ballys Corp

Stepstone Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stepstone Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Ballys Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ballys Corp are ranked lower than 15 (%) 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.

Pair Trading with Stepstone and Ballys Corp

The main advantage of trading using opposite Stepstone and Ballys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Ballys Corp 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 Ballys Corp will offset losses from the drop in Ballys Corp's long position.

The idea behind Stepstone Group and Ballys Corp 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.