Correlation Between Stepan and PSJHOG
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By analyzing existing cross correlation between Stepan Company and PSJHOG 27 01 OCT 51, you can compare the effects of market volatilities on Stepan and PSJHOG 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 PSJHOG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and PSJHOG.
Diversification Opportunities for Stepan and PSJHOG
Poor diversification
The 3 months correlation between Stepan and PSJHOG is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and PSJHOG 27 01 OCT 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSJHOG 27 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 PSJHOG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSJHOG 27 01 has no effect on the direction of Stepan i.e., Stepan and PSJHOG go up and down completely randomly.
Pair Corralation between Stepan and PSJHOG
Considering the 90-day investment horizon Stepan Company is expected to under-perform the PSJHOG. In addition to that, Stepan is 1.28 times more volatile than PSJHOG 27 01 OCT 51. It trades about -0.08 of its total potential returns per unit of risk. PSJHOG 27 01 OCT 51 is currently generating about -0.01 per unit of volatility. If you would invest 5,984 in PSJHOG 27 01 OCT 51 on November 4, 2024 and sell it today you would lose (122.00) from holding PSJHOG 27 01 OCT 51 or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 53.66% |
| Values | Daily Returns |
Stepan Company vs. PSJHOG 27 01 OCT 51
Performance |
| Timeline |
| Stepan Company |
| PSJHOG 27 01 |
Stepan and PSJHOG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and PSJHOG
The main advantage of trading using opposite Stepan and PSJHOG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, PSJHOG 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 PSJHOG will offset losses from the drop in PSJHOG's long position.The idea behind Stepan Company and PSJHOG 27 01 OCT 51 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.| PSJHOG vs. Triumph Apparel | PSJHOG vs. Grupo Simec SAB | PSJHOG vs. Tandy Leather Factory | PSJHOG vs. Enzyme Environmental Solutions |
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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