Correlation Between Stepan and 126408GS6
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By analyzing existing cross correlation between Stepan Company and CSX P 622, you can compare the effects of market volatilities on Stepan and 126408GS6 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 126408GS6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and 126408GS6.
Diversification Opportunities for Stepan and 126408GS6
Significant diversification
The 3 months correlation between Stepan and 126408GS6 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and CSX P 622 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 622 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 126408GS6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 622 has no effect on the direction of Stepan i.e., Stepan and 126408GS6 go up and down completely randomly.
Pair Corralation between Stepan and 126408GS6
Considering the 90-day investment horizon Stepan Company is expected to generate 0.64 times more return on investment than 126408GS6. However, Stepan Company is 1.57 times less risky than 126408GS6. It trades about -0.07 of its potential returns per unit of risk. CSX P 622 is currently generating about -0.14 per unit of risk. If you would invest 7,668 in Stepan Company on September 13, 2024 and sell it today you would lose (141.50) from holding Stepan Company or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Stepan Company vs. CSX P 622
Performance |
| Timeline |
| Stepan Company |
| CSX P 622 |
Stepan and 126408GS6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and 126408GS6
The main advantage of trading using opposite Stepan and 126408GS6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, 126408GS6 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 126408GS6 will offset losses from the drop in 126408GS6's long position.| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
| 126408GS6 vs. Sapiens International | 126408GS6 vs. Bright Scholar Education | 126408GS6 vs. Nexstar Broadcasting Group | 126408GS6 vs. Datadog |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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