Correlation Between Stepan and Micro Imaging
Can any of the company-specific risk be diversified away by investing in both Stepan and Micro Imaging 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 Micro Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Micro Imaging Technology, you can compare the effects of market volatilities on Stepan and Micro Imaging 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 Micro Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Micro Imaging.
Diversification Opportunities for Stepan and Micro Imaging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and Micro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Micro Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Imaging Technology 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 Micro Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Imaging Technology has no effect on the direction of Stepan i.e., Stepan and Micro Imaging go up and down completely randomly.
Pair Corralation between Stepan and Micro Imaging
If you would invest 0.01 in Micro Imaging Technology on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Micro Imaging Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. Micro Imaging Technology
Performance |
| Timeline |
| Stepan Company |
| Micro Imaging Technology |
Stepan and Micro Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Micro Imaging
The main advantage of trading using opposite Stepan and Micro Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Micro Imaging 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 Micro Imaging will offset losses from the drop in Micro Imaging's long position.The idea behind Stepan Company and Micro Imaging Technology 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.| Micro Imaging vs. TOMI Environmental Solutions | Micro Imaging vs. SCOR PK | Micro Imaging vs. HUMANA INC | Micro Imaging vs. Aquagold International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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