Correlation Between HARRIS and Stepan
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By analyzing existing cross correlation between HARRIS P DEL and Stepan Company, you can compare the effects of market volatilities on HARRIS 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 HARRIS with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of HARRIS and Stepan.
Diversification Opportunities for HARRIS and Stepan
Very good diversification
The 3 months correlation between HARRIS and Stepan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HARRIS P DEL and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and HARRIS 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 HARRIS P DEL 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 HARRIS i.e., HARRIS and Stepan go up and down completely randomly.
Pair Corralation between HARRIS and Stepan
Assuming the 90 days trading horizon HARRIS P DEL is expected to generate 0.28 times more return on investment than Stepan. However, HARRIS P DEL is 3.58 times less risky than Stepan. It trades about -0.02 of its potential returns per unit of risk. Stepan Company is currently generating about -0.03 per unit of risk. If you would invest 9,823 in HARRIS P DEL on September 4, 2024 and sell it today you would lose (500.00) from holding HARRIS P DEL or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
HARRIS P DEL vs. Stepan Company
Performance |
| Timeline |
| HARRIS P DEL |
| Stepan Company |
HARRIS and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HARRIS and Stepan
The main advantage of trading using opposite HARRIS and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HARRIS 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.| HARRIS vs. ServiceNow | HARRIS vs. Anheuser Busch Inbev | HARRIS vs. Boston Beer | HARRIS vs. Molson Coors Brewing |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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