Correlation Between Pinterest and Stepan
Can any of the company-specific risk be diversified away by investing in both Pinterest 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 Pinterest and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Stepan Company, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Stepan.
Diversification Opportunities for Pinterest and Stepan
Average diversification
The 3 months correlation between Pinterest and Stepan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Stepan go up and down completely randomly.
Pair Corralation between Pinterest and Stepan
Given the investment horizon of 90 days Pinterest is expected to generate 1.49 times more return on investment than Stepan. However, Pinterest is 1.49 times more volatile than Stepan Company. It trades about 0.04 of its potential returns per unit of risk. Stepan Company is currently generating about -0.02 per unit of risk. If you would invest 2,387 in Pinterest on September 1, 2024 and sell it today you would earn a total of 645.00 from holding Pinterest or generate 27.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. Stepan Company
Performance |
| Timeline |
| Stepan Company |
Pinterest and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Stepan
The main advantage of trading using opposite Pinterest and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. MediaAlpha | Pinterest vs. Asset Entities Class | Pinterest vs. Yelp Inc | Pinterest vs. Shutterstock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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