Correlation Between Canlan Ice and Stepan
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Stepan 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 Canlan Ice and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Stepan Company, you can compare the effects of market volatilities on Canlan Ice and Stepan 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 Canlan Ice with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Stepan.
Diversification Opportunities for Canlan Ice and Stepan
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canlan and Stepan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Canlan Ice i.e., Canlan Ice and Stepan go up and down completely randomly.
Pair Corralation between Canlan Ice and Stepan
If you would invest 7,387 in Stepan Company on August 27, 2024 and sell it today you would earn a total of 298.00 from holding Stepan Company or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Stepan Company
Performance |
| Timeline |
| Canlan Ice Sports |
| Stepan Company |
Canlan Ice and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Stepan
The main advantage of trading using opposite Canlan Ice and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| Canlan Ice vs. HUMANA INC | Canlan Ice vs. Aquagold International | Canlan Ice vs. Barloworld Ltd ADR | Canlan Ice vs. Morningstar Unconstrained Allocation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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