Correlation Between Stepan and 893830BX6
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By analyzing existing cross correlation between Stepan Company and RIG 875 15 FEB 30, you can compare the effects of market volatilities on Stepan and 893830BX6 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 893830BX6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and 893830BX6.
Diversification Opportunities for Stepan and 893830BX6
Weak diversification
The 3 months correlation between Stepan and 893830BX6 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and RIG 875 15 FEB 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RIG 875 15 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 893830BX6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RIG 875 15 has no effect on the direction of Stepan i.e., Stepan and 893830BX6 go up and down completely randomly.
Pair Corralation between Stepan and 893830BX6
Considering the 90-day investment horizon Stepan Company is expected to under-perform the 893830BX6. In addition to that, Stepan is 4.05 times more volatile than RIG 875 15 FEB 30. It trades about -0.03 of its total potential returns per unit of risk. RIG 875 15 FEB 30 is currently generating about 0.02 per unit of volatility. If you would invest 10,200 in RIG 875 15 FEB 30 on September 2, 2024 and sell it today you would earn a total of 275.00 from holding RIG 875 15 FEB 30 or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.9% |
| Values | Daily Returns |
Stepan Company vs. RIG 875 15 FEB 30
Performance |
| Timeline |
| Stepan Company |
| RIG 875 15 |
Stepan and 893830BX6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and 893830BX6
The main advantage of trading using opposite Stepan and 893830BX6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, 893830BX6 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 893830BX6 will offset losses from the drop in 893830BX6's long position.| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
| 893830BX6 vs. Hooker Furniture | 893830BX6 vs. Sun Country Airlines | 893830BX6 vs. Stepan Company | 893830BX6 vs. Figs Inc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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