Correlation Between Stepan and TransAtlantic Petroleum
Can any of the company-specific risk be diversified away by investing in both Stepan and TransAtlantic Petroleum 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 TransAtlantic Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and TransAtlantic Petroleum, you can compare the effects of market volatilities on Stepan and TransAtlantic Petroleum 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 TransAtlantic Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and TransAtlantic Petroleum.
Diversification Opportunities for Stepan and TransAtlantic Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepan and TransAtlantic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and TransAtlantic Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAtlantic Petroleum 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 TransAtlantic Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAtlantic Petroleum has no effect on the direction of Stepan i.e., Stepan and TransAtlantic Petroleum go up and down completely randomly.
Pair Corralation between Stepan and TransAtlantic Petroleum
If you would invest (100.00) in TransAtlantic Petroleum on September 15, 2024 and sell it today you would earn a total of 100.00 from holding TransAtlantic Petroleum or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Stepan Company vs. TransAtlantic Petroleum
Performance |
| Timeline |
| Stepan Company |
| TransAtlantic Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and TransAtlantic Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and TransAtlantic Petroleum
The main advantage of trading using opposite Stepan and TransAtlantic Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, TransAtlantic Petroleum 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 TransAtlantic Petroleum will offset losses from the drop in TransAtlantic Petroleum's long position.The idea behind Stepan Company and TransAtlantic Petroleum 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.| TransAtlantic Petroleum vs. Yuexiu Transport Infrastructure | TransAtlantic Petroleum vs. Planet Fitness | TransAtlantic Petroleum vs. Stepan Company | TransAtlantic Petroleum vs. Playtika Holding Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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