Correlation Between Stepan and Yik Wo
Can any of the company-specific risk be diversified away by investing in both Stepan and Yik Wo 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 Yik Wo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Yik Wo International, you can compare the effects of market volatilities on Stepan and Yik Wo 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 Yik Wo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Yik Wo.
Diversification Opportunities for Stepan and Yik Wo
Pay attention - limited upside
The 3 months correlation between Stepan and Yik is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Yik Wo International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yik Wo International 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 Yik Wo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yik Wo International has no effect on the direction of Stepan i.e., Stepan and Yik Wo go up and down completely randomly.
Pair Corralation between Stepan and Yik Wo
If you would invest 2.30 in Yik Wo International on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Yik Wo International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Stepan Company vs. Yik Wo International
Performance |
| Timeline |
| Stepan Company |
| Yik Wo International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepan and Yik Wo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Yik Wo
The main advantage of trading using opposite Stepan and Yik Wo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Yik Wo 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 Yik Wo will offset losses from the drop in Yik Wo's long position.The idea behind Stepan Company and Yik Wo International 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.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |