Correlation Between Stepan and CHKEZ Old
Can any of the company-specific risk be diversified away by investing in both Stepan and CHKEZ Old 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 CHKEZ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and CHKEZ Old, you can compare the effects of market volatilities on Stepan and CHKEZ Old 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 CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and CHKEZ Old.
Diversification Opportunities for Stepan and CHKEZ Old
Very weak diversification
The 3 months correlation between Stepan and CHKEZ is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of Stepan i.e., Stepan and CHKEZ Old go up and down completely randomly.
Pair Corralation between Stepan and CHKEZ Old
If you would invest 6,404 in CHKEZ Old on October 26, 2024 and sell it today you would earn a total of 0.00 from holding CHKEZ Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 1.69% |
| Values | Daily Returns |
Stepan Company vs. CHKEZ Old
Performance |
| Timeline |
| Stepan Company |
| CHKEZ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and CHKEZ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and CHKEZ Old
The main advantage of trading using opposite Stepan and CHKEZ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, CHKEZ Old 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 CHKEZ Old will offset losses from the drop in CHKEZ Old's long position.The idea behind Stepan Company and CHKEZ Old 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.| CHKEZ Old vs. Porvair plc | CHKEZ Old vs. Delta Air Lines | CHKEZ Old vs. Stepan Company | CHKEZ Old vs. EvoAir 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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