Correlation Between Stepan and Sanyo Special
Can any of the company-specific risk be diversified away by investing in both Stepan and Sanyo Special 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 Sanyo Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Sanyo Special Steel, you can compare the effects of market volatilities on Stepan and Sanyo Special 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 Sanyo Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Sanyo Special.
Diversification Opportunities for Stepan and Sanyo Special
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stepan and Sanyo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Sanyo Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Special Steel 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 Sanyo Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Special Steel has no effect on the direction of Stepan i.e., Stepan and Sanyo Special go up and down completely randomly.
Pair Corralation between Stepan and Sanyo Special
If you would invest 7,252 in Stepan Company on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Stepan Company or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. Sanyo Special Steel
Performance |
| Timeline |
| Stepan Company |
| Sanyo Special Steel |
Stepan and Sanyo Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Sanyo Special
The main advantage of trading using opposite Stepan and Sanyo Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Sanyo Special 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 Sanyo Special will offset losses from the drop in Sanyo Special's long position.| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
| Sanyo Special vs. Software Acquisition Group | Sanyo Special vs. National CineMedia | Sanyo Special vs. Fluent Inc | Sanyo Special vs. Deluxe |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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