Correlation Between Phunware and Stepan
Can any of the company-specific risk be diversified away by investing in both Phunware 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 Phunware and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phunware and Stepan Company, you can compare the effects of market volatilities on Phunware 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 Phunware with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phunware and Stepan.
Diversification Opportunities for Phunware and Stepan
Good diversification
The 3 months correlation between Phunware and Stepan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Phunware and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Phunware 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 Phunware 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 Phunware i.e., Phunware and Stepan go up and down completely randomly.
Pair Corralation between Phunware and Stepan
Assuming the 90 days horizon Phunware is expected to generate 12.3 times more return on investment than Stepan. However, Phunware is 12.3 times more volatile than Stepan Company. It trades about 0.58 of its potential returns per unit of risk. Stepan Company is currently generating about -0.03 per unit of risk. If you would invest 13.00 in Phunware on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Phunware or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.14% |
| Values | Daily Returns |
Phunware vs. Stepan Company
Performance |
| Timeline |
| Phunware |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stepan Company |
Phunware and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phunware and Stepan
The main advantage of trading using opposite Phunware and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phunware 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.| Phunware vs. Stepan Company | Phunware vs. Griffon | Phunware vs. NL Industries | Phunware vs. Cementos Pacasmayo SAA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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