Correlation Between Stepan and SmartStop Self
Can any of the company-specific risk be diversified away by investing in both Stepan and SmartStop Self 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 SmartStop Self into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and SmartStop Self Storage, you can compare the effects of market volatilities on Stepan and SmartStop Self 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 SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and SmartStop Self.
Diversification Opportunities for Stepan and SmartStop Self
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and SmartStop is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of Stepan i.e., Stepan and SmartStop Self go up and down completely randomly.
Pair Corralation between Stepan and SmartStop Self
Considering the 90-day investment horizon Stepan Company is expected to under-perform the SmartStop Self. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 2.36 times less risky than SmartStop Self. The stock trades about -0.03 of its potential returns per unit of risk. The SmartStop Self Storage is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,218 in SmartStop Self Storage on August 31, 2024 and sell it today you would lose (333.00) from holding SmartStop Self Storage or give up 27.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Stepan Company vs. SmartStop Self Storage
Performance |
| Timeline |
| Stepan Company |
| SmartStop Self Storage |
Stepan and SmartStop Self Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and SmartStop Self
The main advantage of trading using opposite Stepan and SmartStop Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, SmartStop Self 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 SmartStop Self will offset losses from the drop in SmartStop Self's long position.The idea behind Stepan Company and SmartStop Self Storage 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.| SmartStop Self vs. LXP Industrial Trust | SmartStop Self vs. First Industrial Realty | SmartStop Self vs. Plymouth Industrial REIT | SmartStop Self vs. Terreno Realty |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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