Correlation Between Stepan and East Resources
Can any of the company-specific risk be diversified away by investing in both Stepan and East Resources 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 East Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and East Resources Acquisition, you can compare the effects of market volatilities on Stepan and East Resources 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 East Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and East Resources.
Diversification Opportunities for Stepan and East Resources
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stepan and East is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and East Resources Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Resources Acqui 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 East Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Resources Acqui has no effect on the direction of Stepan i.e., Stepan and East Resources go up and down completely randomly.
Pair Corralation between Stepan and East Resources
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 | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Stepan Company vs. East Resources Acquisition
Performance |
| Timeline |
| Stepan Company |
| East Resources Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and East Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and East Resources
The main advantage of trading using opposite Stepan and East Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, East Resources 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 East Resources will offset losses from the drop in East Resources' long position.| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
| East Resources vs. Rackspace Technology | East Resources vs. Rumble Inc | East Resources vs. Brunswick | East Resources vs. NextNav Warrant |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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