Correlation Between MYT Netherlands and Stepan
Can any of the company-specific risk be diversified away by investing in both MYT Netherlands 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 MYT Netherlands and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYT Netherlands Parent and Stepan Company, you can compare the effects of market volatilities on MYT Netherlands 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 MYT Netherlands with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Stepan.
Diversification Opportunities for MYT Netherlands and Stepan
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MYT and Stepan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Stepan go up and down completely randomly.
Pair Corralation between MYT Netherlands and Stepan
Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 2.92 times more return on investment than Stepan. However, MYT Netherlands is 2.92 times more volatile than Stepan Company. It trades about 0.02 of its potential returns per unit of risk. Stepan Company is currently generating about -0.05 per unit of risk. If you would invest 970.00 in MYT Netherlands Parent on November 1, 2024 and sell it today you would lose (45.00) from holding MYT Netherlands Parent or give up 4.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
MYT Netherlands Parent vs. Stepan Company
Performance |
| Timeline |
| MYT Netherlands Parent |
| Stepan Company |
MYT Netherlands and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYT Netherlands and Stepan
The main advantage of trading using opposite MYT Netherlands and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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.| MYT Netherlands vs. Movado Group | MYT Netherlands vs. Envela Corp | MYT Netherlands vs. Tapestry | MYT Netherlands vs. Capri Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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