Correlation Between Stepan and ACG Metals
Can any of the company-specific risk be diversified away by investing in both Stepan and ACG Metals 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 ACG Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and ACG Metals Limited, you can compare the effects of market volatilities on Stepan and ACG Metals 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 ACG Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and ACG Metals.
Diversification Opportunities for Stepan and ACG Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and ACG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and ACG Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Metals Limited 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 ACG Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Metals Limited has no effect on the direction of Stepan i.e., Stepan and ACG Metals go up and down completely randomly.
Pair Corralation between Stepan and ACG Metals
If you would invest 1,650 in ACG Metals Limited on August 31, 2024 and sell it today you would earn a total of 0.00 from holding ACG Metals Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 43.1% |
| Values | Daily Returns |
Stepan Company vs. ACG Metals Limited
Performance |
| Timeline |
| Stepan Company |
| ACG Metals Limited |
Stepan and ACG Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and ACG Metals
The main advantage of trading using opposite Stepan and ACG Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, ACG Metals 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 ACG Metals will offset losses from the drop in ACG Metals' long position.The idea behind Stepan Company and ACG Metals Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ACG Metals vs. Legacy Education | ACG Metals vs. Apple Inc | ACG Metals vs. NVIDIA | ACG Metals vs. Microsoft |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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