Correlation Between Stepstone and Organic Sales

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

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

Diversification Opportunities for Stepstone and Organic Sales

0.0

Correlation Coefficient

Stepstone  Organic Sales

Pay attention - limited upside

The 3 months correlation between Stepstone and Organic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Organic Sales and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Sales 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 Organic Sales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Sales has no effect on the direction of Stepstone i.e., Stepstone and Organic Sales go up and down completely randomly.

Pair Corralation between Stepstone and Organic Sales

If you would invest  2,339  in Stepstone Group on September 23, 2024 and sell it today you would earn a total of  3,473  from holding Stepstone Group or generate 148.48% return on investment over 90 days.

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

Stepstone Group  vs.  Organic Sales and

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Organic Sales

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organic Sales and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Organic Sales is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Stepstone and Organic Sales

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

The idea behind Stepstone Group and Organic Sales and 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.