Correlation Between Stepan and Via Varejo
Can any of the company-specific risk be diversified away by investing in both Stepan and Via Varejo 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 Via Varejo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Via Varejo SA, you can compare the effects of market volatilities on Stepan and Via Varejo 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 Via Varejo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Via Varejo.
Diversification Opportunities for Stepan and Via Varejo
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and Via is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Via Varejo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Varejo SA 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 Via Varejo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Varejo SA has no effect on the direction of Stepan i.e., Stepan and Via Varejo go up and down completely randomly.
Pair Corralation between Stepan and Via Varejo
If you would invest 55.00 in Via Varejo SA on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Via Varejo SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Stepan Company vs. Via Varejo SA
Performance |
| Timeline |
| Stepan Company |
| Via Varejo SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and Via Varejo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Via Varejo
The main advantage of trading using opposite Stepan and Via Varejo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Via Varejo 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 Via Varejo will offset losses from the drop in Via Varejo's long position.The idea behind Stepan Company and Via Varejo SA 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.| Via Varejo vs. Keurig Dr Pepper | Via Varejo vs. Naked Wines plc | Via Varejo vs. The Mosaic | Via Varejo vs. Sensient Technologies |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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