Correlation Between Stepstone and Treace Medical

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

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

Diversification Opportunities for Stepstone and Treace Medical

0.09

Correlation Coefficient

Stepstone  Treace Medical

Significant diversification

The 3 months correlation between Stepstone and Treace is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Treace Medical Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treace Medical Concepts 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 Treace Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treace Medical Concepts has no effect on the direction of Stepstone i.e., Stepstone and Treace Medical go up and down completely randomly.

Pair Corralation between Stepstone and Treace Medical

Given the investment horizon of 90 days Stepstone is expected to generate 1.73 times less return on investment than Treace Medical. But when comparing it to its historical volatility, Stepstone Group is 1.21 times less risky than Treace Medical. It trades about 0.04 of its potential returns per unit of risk. Treace Medical Concepts is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  565.00  in Treace Medical Concepts on July 18, 2025 and sell it today you would earn a total of  47.00  from holding Treace Medical Concepts or generate 8.32% return on investment over 90 days.

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

Stepstone Group  vs.  Treace Medical Concepts

Stepstone Group

Risk-Adjusted Performance

Soft

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 invariable technical and fundamental indicators, Stepstone is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Treace Medical Concepts

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Treace Medical Concepts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Treace Medical may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Stepstone and Treace Medical

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

The idea behind Stepstone Group and Treace Medical Concepts 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.