Correlation Between Stepan and 00206RDQ2
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By analyzing existing cross correlation between Stepan Company and ATT INC 425, you can compare the effects of market volatilities on Stepan and 00206RDQ2 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 00206RDQ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and 00206RDQ2.
Diversification Opportunities for Stepan and 00206RDQ2
Good diversification
The 3 months correlation between Stepan and 00206RDQ2 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and ATT INC 425 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT INC 425 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 00206RDQ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT INC 425 has no effect on the direction of Stepan i.e., Stepan and 00206RDQ2 go up and down completely randomly.
Pair Corralation between Stepan and 00206RDQ2
Considering the 90-day investment horizon Stepan Company is expected to under-perform the 00206RDQ2. In addition to that, Stepan is 7.22 times more volatile than ATT INC 425. It trades about -0.03 of its total potential returns per unit of risk. ATT INC 425 is currently generating about 0.05 per unit of volatility. If you would invest 9,809 in ATT INC 425 on September 12, 2024 and sell it today you would earn a total of 159.00 from holding ATT INC 425 or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. ATT INC 425
Performance |
| Timeline |
| Stepan Company |
| ATT INC 425 |
Stepan and 00206RDQ2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and 00206RDQ2
The main advantage of trading using opposite Stepan and 00206RDQ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, 00206RDQ2 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 00206RDQ2 will offset losses from the drop in 00206RDQ2's long position.The idea behind Stepan Company and ATT INC 425 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.| 00206RDQ2 vs. Coty Inc | 00206RDQ2 vs. JD Sports Fashion | 00206RDQ2 vs. European Wax Center | 00206RDQ2 vs. Hooker Furniture |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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