Correlation Between Stepan and WALMART
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By analyzing existing cross correlation between Stepan Company and WALMART INC 62, you can compare the effects of market volatilities on Stepan and WALMART 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 WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and WALMART.
Diversification Opportunities for Stepan and WALMART
Significant diversification
The 3 months correlation between Stepan and WALMART is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and WALMART INC 62 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART INC 62 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 WALMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALMART INC 62 has no effect on the direction of Stepan i.e., Stepan and WALMART go up and down completely randomly.
Pair Corralation between Stepan and WALMART
Considering the 90-day investment horizon Stepan Company is expected to under-perform the WALMART. In addition to that, Stepan is 1.83 times more volatile than WALMART INC 62. It trades about -0.01 of its total potential returns per unit of risk. WALMART INC 62 is currently generating about 0.07 per unit of volatility. If you would invest 10,873 in WALMART INC 62 on August 27, 2024 and sell it today you would earn a total of 873.00 from holding WALMART INC 62 or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stepan Company vs. WALMART INC 62
Performance |
| Timeline |
| Stepan Company |
| WALMART INC 62 |
Stepan and WALMART Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and WALMART
The main advantage of trading using opposite Stepan and WALMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, WALMART 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 WALMART will offset losses from the drop in WALMART's long position.The idea behind Stepan Company and WALMART INC 62 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.| WALMART vs. The Coca Cola | WALMART vs. JPMorgan Chase Co | WALMART vs. Dupont De Nemours | WALMART vs. Alcoa Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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