Correlation Between Stepan and WiMi Hologram
Can any of the company-specific risk be diversified away by investing in both Stepan and WiMi Hologram at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stepan and WiMi Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and WiMi Hologram Cloud, you can compare the effects of market volatilities on Stepan and WiMi Hologram 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 WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and WiMi Hologram.
Diversification Opportunities for Stepan and WiMi Hologram
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stepan and WiMi is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud 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 WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of Stepan i.e., Stepan and WiMi Hologram go up and down completely randomly.
Pair Corralation between Stepan and WiMi Hologram
Considering the 90-day investment horizon Stepan Company is expected to under-perform the WiMi Hologram. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 3.45 times less risky than WiMi Hologram. The stock trades about -0.07 of its potential returns per unit of risk. The WiMi Hologram Cloud is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 84.00 in WiMi Hologram Cloud on September 13, 2024 and sell it today you would earn a total of 7.00 from holding WiMi Hologram Cloud or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepan Company vs. WiMi Hologram Cloud
Performance |
| Timeline |
| Stepan Company |
| WiMi Hologram Cloud |
Stepan and WiMi Hologram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and WiMi Hologram
The main advantage of trading using opposite Stepan and WiMi Hologram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, WiMi Hologram 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 WiMi Hologram will offset losses from the drop in WiMi Hologram's long position.| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
| WiMi Hologram vs. National CineMedia | WiMi Hologram vs. Baosheng Media Group | WiMi Hologram vs. Townsquare Media | WiMi Hologram vs. Dolphin Entertainment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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