Correlation Between Stepan and SOUTHWEST
Specify exactly 2 symbols:
By analyzing existing cross correlation between Stepan Company and SOUTHWEST AIRLS 345, you can compare the effects of market volatilities on Stepan and SOUTHWEST 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 SOUTHWEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and SOUTHWEST.
Diversification Opportunities for Stepan and SOUTHWEST
Good diversification
The 3 months correlation between Stepan and SOUTHWEST is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and SOUTHWEST AIRLS 345 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHWEST AIRLS 345 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 SOUTHWEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHWEST AIRLS 345 has no effect on the direction of Stepan i.e., Stepan and SOUTHWEST go up and down completely randomly.
Pair Corralation between Stepan and SOUTHWEST
Considering the 90-day investment horizon Stepan Company is expected to generate 3.27 times more return on investment than SOUTHWEST. However, Stepan is 3.27 times more volatile than SOUTHWEST AIRLS 345. It trades about 0.13 of its potential returns per unit of risk. SOUTHWEST AIRLS 345 is currently generating about -0.05 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 | 95.0% |
| Values | Daily Returns |
Stepan Company vs. SOUTHWEST AIRLS 345
Performance |
| Timeline |
| Stepan Company |
| SOUTHWEST AIRLS 345 |
Stepan and SOUTHWEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and SOUTHWEST
The main advantage of trading using opposite Stepan and SOUTHWEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, SOUTHWEST 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 SOUTHWEST will offset losses from the drop in SOUTHWEST's long position.The idea behind Stepan Company and SOUTHWEST AIRLS 345 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.| SOUTHWEST vs. Origin Materials | SOUTHWEST vs. Sealed Air | SOUTHWEST vs. Mativ Holdings | SOUTHWEST vs. Stepan Company |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |