Correlation Between Stepan and 01609WBA9
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By analyzing existing cross correlation between Stepan Company and BABA 325 09 FEB 61, you can compare the effects of market volatilities on Stepan and 01609WBA9 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 01609WBA9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and 01609WBA9.
Diversification Opportunities for Stepan and 01609WBA9
Good diversification
The 3 months correlation between Stepan and 01609WBA9 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and BABA 325 09 FEB 61 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BABA 325 09 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 01609WBA9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BABA 325 09 has no effect on the direction of Stepan i.e., Stepan and 01609WBA9 go up and down completely randomly.
Pair Corralation between Stepan and 01609WBA9
Considering the 90-day investment horizon Stepan Company is expected to generate 1.34 times more return on investment than 01609WBA9. However, Stepan is 1.34 times more volatile than BABA 325 09 FEB 61. It trades about 0.13 of its potential returns per unit of risk. BABA 325 09 FEB 61 is currently generating about -0.16 per unit of risk. If you would invest 7,246 in Stepan Company on September 3, 2024 and sell it today you would earn a total of 444.00 from holding Stepan Company or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.0% |
| Values | Daily Returns |
Stepan Company vs. BABA 325 09 FEB 61
Performance |
| Timeline |
| Stepan Company |
| BABA 325 09 |
Stepan and 01609WBA9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and 01609WBA9
The main advantage of trading using opposite Stepan and 01609WBA9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, 01609WBA9 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 01609WBA9 will offset losses from the drop in 01609WBA9's long position.The idea behind Stepan Company and BABA 325 09 FEB 61 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.| 01609WBA9 vs. AEP TEX INC | 01609WBA9 vs. US BANK NATIONAL | 01609WBA9 vs. MetLife | 01609WBA9 vs. Brera Holdings PLC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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