Correlation Between Stepstone and Jewett Cameron

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

By analyzing existing cross correlation between Stepstone Group and Jewett Cameron Trading, you can compare the effects of market volatilities on Stepstone and Jewett Cameron 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 Jewett Cameron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Jewett Cameron.

Diversification Opportunities for Stepstone and Jewett Cameron

-0.49

Correlation Coefficient

Stepstone  Jewett Cameron

Very good diversification

The 3 months correlation between Stepstone and Jewett is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Jewett Cameron Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jewett Cameron Trading 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 Jewett Cameron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jewett Cameron Trading has no effect on the direction of Stepstone i.e., Stepstone and Jewett Cameron go up and down completely randomly.

Pair Corralation between Stepstone and Jewett Cameron

Given the investment horizon of 90 days Stepstone Group is expected to generate 1.25 times more return on investment than Jewett Cameron. However, Stepstone is 1.25 times more volatile than Jewett Cameron Trading. It trades about 0.19 of its potential returns per unit of risk. Jewett Cameron Trading is currently generating about 0.02 per unit of risk. If you would invest  5,900  in Stepstone Group on September 2, 2024 and sell it today you would earn a total of  689.00  from holding Stepstone Group or generate 11.68% return on investment over 90 days.

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

Stepstone Group  vs.  Jewett Cameron Trading

Stepstone Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stepstone Group are ranked lower than 12 (%) 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.

Jewett Cameron Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jewett Cameron Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jewett Cameron is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stepstone and Jewett Cameron

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

The idea behind Stepstone Group and Jewett Cameron Trading 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.