Correlation Between Stepan and Clovis Oncology
Can any of the company-specific risk be diversified away by investing in both Stepan and Clovis Oncology 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 Clovis Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Clovis Oncology, you can compare the effects of market volatilities on Stepan and Clovis Oncology 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 Clovis Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Clovis Oncology.
Diversification Opportunities for Stepan and Clovis Oncology
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stepan and Clovis is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Clovis Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clovis Oncology 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 Clovis Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clovis Oncology has no effect on the direction of Stepan i.e., Stepan and Clovis Oncology go up and down completely randomly.
Pair Corralation between Stepan and Clovis Oncology
If you would invest 7,252 in Stepan Company on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Stepan Company or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Stepan Company vs. Clovis Oncology
Performance |
| Timeline |
| Stepan Company |
| Clovis Oncology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and Clovis Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Clovis Oncology
The main advantage of trading using opposite Stepan and Clovis Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Clovis Oncology 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 Clovis Oncology will offset losses from the drop in Clovis Oncology's long position.| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
| Clovis Oncology vs. Stepan Company | Clovis Oncology vs. Biglari Holdings | Clovis Oncology vs. Eastman Kodak Co | Clovis Oncology vs. Shake Shack |
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 Stocks Directory module to find actively traded stocks across global markets.
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