Correlation Between ENERGY and Stepan
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By analyzing existing cross correlation between ENERGY TRANSFER OPER and Stepan Company, you can compare the effects of market volatilities on ENERGY and Stepan 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 ENERGY with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGY and Stepan.
Diversification Opportunities for ENERGY and Stepan
Good diversification
The 3 months correlation between ENERGY and Stepan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ENERGY TRANSFER OPER and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and ENERGY 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 ENERGY TRANSFER OPER are associated (or correlated) with Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of ENERGY i.e., ENERGY and Stepan go up and down completely randomly.
Pair Corralation between ENERGY and Stepan
Assuming the 90 days trading horizon ENERGY TRANSFER OPER is expected to generate 0.46 times more return on investment than Stepan. However, ENERGY TRANSFER OPER is 2.19 times less risky than Stepan. It trades about 0.01 of its potential returns per unit of risk. Stepan Company is currently generating about -0.02 per unit of risk. If you would invest 10,072 in ENERGY TRANSFER OPER on September 2, 2024 and sell it today you would earn a total of 45.00 from holding ENERGY TRANSFER OPER or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
ENERGY TRANSFER OPER vs. Stepan Company
Performance |
| Timeline |
| ENERGY TRANSFER OPER |
| Stepan Company |
ENERGY and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGY and Stepan
The main advantage of trading using opposite ENERGY and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGY position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.| ENERGY vs. Funko Inc | ENERGY vs. Compania Cervecerias Unidas | ENERGY vs. Emerson Radio | ENERGY vs. Xponential Fitness |
| Stepan vs. Linde plc Ordinary | Stepan vs. Air Products and | Stepan vs. Aquagold International | Stepan vs. Thrivent High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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