Correlation Between Stepan and MASSIN
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By analyzing existing cross correlation between Stepan Company and MASSIN 3067 01 APR 52, you can compare the effects of market volatilities on Stepan and MASSIN 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 MASSIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and MASSIN.
Diversification Opportunities for Stepan and MASSIN
Good diversification
The 3 months correlation between Stepan and MASSIN is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and MASSIN 3067 01 APR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASSIN 3067 01 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 MASSIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASSIN 3067 01 has no effect on the direction of Stepan i.e., Stepan and MASSIN go up and down completely randomly.
Pair Corralation between Stepan and MASSIN
Considering the 90-day investment horizon Stepan Company is expected to under-perform the MASSIN. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 1.76 times less risky than MASSIN. The stock trades about -0.03 of its potential returns per unit of risk. The MASSIN 3067 01 APR 52 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,923 in MASSIN 3067 01 APR 52 on September 4, 2024 and sell it today you would lose (851.00) from holding MASSIN 3067 01 APR 52 or give up 10.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
Stepan Company vs. MASSIN 3067 01 APR 52
Performance |
| Timeline |
| Stepan Company |
| MASSIN 3067 01 |
Stepan and MASSIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and MASSIN
The main advantage of trading using opposite Stepan and MASSIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, MASSIN 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 MASSIN will offset losses from the drop in MASSIN's long position.The idea behind Stepan Company and MASSIN 3067 01 APR 52 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.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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