Correlation Between Stepan and ABIOMED
Can any of the company-specific risk be diversified away by investing in both Stepan and ABIOMED 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 Stepan and ABIOMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and ABIOMED, you can compare the effects of market volatilities on Stepan and ABIOMED 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 Stepan with a short position of ABIOMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and ABIOMED.
Diversification Opportunities for Stepan and ABIOMED
Significant diversification
The 3 months correlation between Stepan and ABIOMED is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and ABIOMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABIOMED and Stepan 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 Stepan Company are associated (or correlated) with ABIOMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABIOMED has no effect on the direction of Stepan i.e., Stepan and ABIOMED go up and down completely randomly.
Pair Corralation between Stepan and ABIOMED
If you would invest (100.00) in ABIOMED on September 14, 2024 and sell it today you would earn a total of 100.00 from holding ABIOMED or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Stepan Company vs. ABIOMED
Performance |
| Timeline |
| Stepan Company |
| ABIOMED |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and ABIOMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and ABIOMED
The main advantage of trading using opposite Stepan and ABIOMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, ABIOMED 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 ABIOMED will offset losses from the drop in ABIOMED's long position.| Stepan vs. LyondellBasell Industries NV | Stepan vs. Cabot | Stepan vs. Westlake Chemical | Stepan vs. Air Products and |
| ABIOMED vs. Ryanair Holdings PLC | ABIOMED vs. Stepan Company | ABIOMED vs. Payoneer Global | ABIOMED vs. Minerals Technologies |
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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