Correlation Between Stepstone and SIMON

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

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

Diversification Opportunities for Stepstone and SIMON

0.13

Correlation Coefficient

Stepstone  SIMON

Average diversification

The 3 months correlation between Stepstone and SIMON is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and SIMON PPTY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMON PPTY GROUP 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 SIMON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMON PPTY GROUP has no effect on the direction of Stepstone i.e., Stepstone and SIMON go up and down completely randomly.

Pair Corralation between Stepstone and SIMON

Given the investment horizon of 90 days Stepstone is expected to generate 2.82 times less return on investment than SIMON. But when comparing it to its historical volatility, Stepstone Group is 2.35 times less risky than SIMON. It trades about 0.05 of its potential returns per unit of risk. SIMON PPTY GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,766  in SIMON PPTY GROUP on May 25, 2025 and sell it today you would earn a total of  721.00  from holding SIMON PPTY GROUP or generate 8.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.35%
Values	Daily Returns

Stepstone Group  vs.  SIMON PPTY GROUP

Stepstone Group

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Stepstone Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Stepstone may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SIMON PPTY GROUP

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in SIMON PPTY GROUP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, SIMON sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stepstone and SIMON

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

The idea behind Stepstone Group and SIMON PPTY GROUP 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.