Correlation Between Stepan and Original Sixteen
Can any of the company-specific risk be diversified away by investing in both Stepan and Original Sixteen 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 Original Sixteen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Original Sixteen To, you can compare the effects of market volatilities on Stepan and Original Sixteen 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 Original Sixteen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Original Sixteen.
Diversification Opportunities for Stepan and Original Sixteen
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stepan and Original is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Original Sixteen To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Original Sixteen 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 Original Sixteen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Original Sixteen has no effect on the direction of Stepan i.e., Stepan and Original Sixteen go up and down completely randomly.
Pair Corralation between Stepan and Original Sixteen
If you would invest 0.21 in Original Sixteen To on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Original Sixteen To or generate 0.0% 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. Original Sixteen To
Performance |
| Timeline |
| Stepan Company |
| Original Sixteen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and Original Sixteen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Original Sixteen
The main advantage of trading using opposite Stepan and Original Sixteen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Original Sixteen 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 Original Sixteen will offset losses from the drop in Original Sixteen's long position.| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
| Original Sixteen vs. Zijin Mining Group | Original Sixteen vs. Asure Software | Original Sixteen vs. Agnico Eagle Mines | Original Sixteen vs. Mangazeya Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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