Correlation Between Stepstone and NESNVX

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

By analyzing existing cross correlation between Stepstone Group and NESNVX 495 14 MAR 30, you can compare the effects of market volatilities on Stepstone and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and NESNVX.

Diversification Opportunities for Stepstone and NESNVX

0.66

Correlation Coefficient

Stepstone  NESNVX

Poor diversification

The 3 months correlation between Stepstone and NESNVX is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and NESNVX 495 14 MAR 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 495 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 495 14 has no effect on the direction of Stepstone i.e., Stepstone and NESNVX go up and down completely randomly.

Pair Corralation between Stepstone and NESNVX

Given the investment horizon of 90 days Stepstone Group is expected to generate 4.54 times more return on investment than NESNVX. However, Stepstone is 4.54 times more volatile than NESNVX 495 14 MAR 30. It trades about 0.05 of its potential returns per unit of risk. NESNVX 495 14 MAR 30 is currently generating about -0.14 per unit of risk. If you would invest  5,662  in Stepstone Group on September 30, 2024 and sell it today you would earn a total of  326.00  from holding Stepstone Group or generate 5.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	43.75%
Values	Daily Returns

Stepstone Group  vs.  NESNVX 495 14 MAR 30

Stepstone Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stepstone Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, Stepstone may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NESNVX 495 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 495 14 MAR 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stepstone and NESNVX

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

The idea behind Stepstone Group and NESNVX 495 14 MAR 30 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.