Correlation Between Stepan and Centuri Holdings,
Can any of the company-specific risk be diversified away by investing in both Stepan and Centuri Holdings, 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 Centuri Holdings, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Centuri Holdings,, you can compare the effects of market volatilities on Stepan and Centuri Holdings, 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 Centuri Holdings,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Centuri Holdings,.
Diversification Opportunities for Stepan and Centuri Holdings,
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stepan and Centuri is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Centuri Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuri Holdings, 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 Centuri Holdings,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuri Holdings, has no effect on the direction of Stepan i.e., Stepan and Centuri Holdings, go up and down completely randomly.
Pair Corralation between Stepan and Centuri Holdings,
Considering the 90-day investment horizon Stepan Company is expected to under-perform the Centuri Holdings,. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 1.52 times less risky than Centuri Holdings,. The stock trades about -0.09 of its potential returns per unit of risk. The Centuri Holdings, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,016 in Centuri Holdings, on September 14, 2024 and sell it today you would earn a total of 57.00 from holding Centuri Holdings, or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. Centuri Holdings,
Performance |
| Timeline |
| Stepan Company |
| Centuri Holdings, |
Stepan and Centuri Holdings, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Centuri Holdings,
The main advantage of trading using opposite Stepan and Centuri Holdings, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Centuri Holdings, 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 Centuri Holdings, will offset losses from the drop in Centuri Holdings,'s long position.| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
| Centuri Holdings, vs. JetBlue Airways Corp | Centuri Holdings, vs. Ecolab Inc | Centuri Holdings, vs. SkyWest | Centuri Holdings, vs. Stepan Company |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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