Correlation Between Stepan and Nascent Wine
Can any of the company-specific risk be diversified away by investing in both Stepan and Nascent Wine 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 Nascent Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Nascent Wine, you can compare the effects of market volatilities on Stepan and Nascent Wine 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 Nascent Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Nascent Wine.
Diversification Opportunities for Stepan and Nascent Wine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and Nascent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Nascent Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nascent Wine 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 Nascent Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nascent Wine has no effect on the direction of Stepan i.e., Stepan and Nascent Wine go up and down completely randomly.
Pair Corralation between Stepan and Nascent Wine
If you would invest 0.01 in Nascent Wine on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Nascent Wine 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. Nascent Wine
Performance |
| Timeline |
| Stepan Company |
| Nascent Wine |
Stepan and Nascent Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Nascent Wine
The main advantage of trading using opposite Stepan and Nascent Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Nascent Wine 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 Nascent Wine will offset losses from the drop in Nascent Wine's long position.The idea behind Stepan Company and Nascent Wine 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.| Nascent Wine vs. Signet International Holdings | Nascent Wine vs. National Beverage Corp | Nascent Wine vs. PT Astra International | Nascent Wine vs. Vita Coco |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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