Correlation Between Stepstone and Amer Sports,

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

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

Diversification Opportunities for Stepstone and Amer Sports,

0.87

Correlation Coefficient

Stepstone  Amer Sports,

Very poor diversification

The 3 months correlation between Stepstone and Amer is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, 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 Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Stepstone i.e., Stepstone and Amer Sports, go up and down completely randomly.

Pair Corralation between Stepstone and Amer Sports,

Given the investment horizon of 90 days Stepstone is expected to generate 3.21 times less return on investment than Amer Sports,. But when comparing it to its historical volatility, Stepstone Group is 1.49 times less risky than Amer Sports,. It trades about 0.16 of its potential returns per unit of risk. Amer Sports, is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,339  in Amer Sports, on September 3, 2024 and sell it today you would earn a total of  1,294  from holding Amer Sports, or generate 96.64% return on investment over 90 days.

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

Stepstone Group  vs.  Amer Sports,

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.

Amer Sports,

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stepstone and Amer Sports,

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

The idea behind Stepstone Group and Amer Sports, 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.