Correlation Between 58013MFC3 and Stepan
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By analyzing existing cross correlation between MCDONALDS P MEDIUM and Stepan Company, you can compare the effects of market volatilities on 58013MFC3 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 58013MFC3 with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of 58013MFC3 and Stepan.
Diversification Opportunities for 58013MFC3 and Stepan
Good diversification
The 3 months correlation between 58013MFC3 and Stepan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding MCDONALDS P MEDIUM and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and 58013MFC3 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 MCDONALDS P MEDIUM 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 58013MFC3 i.e., 58013MFC3 and Stepan go up and down completely randomly.
Pair Corralation between 58013MFC3 and Stepan
Assuming the 90 days trading horizon MCDONALDS P MEDIUM is expected to generate 26.07 times more return on investment than Stepan. However, 58013MFC3 is 26.07 times more volatile than Stepan Company. It trades about 0.04 of its potential returns per unit of risk. Stepan Company is currently generating about -0.03 per unit of risk. If you would invest 9,314 in MCDONALDS P MEDIUM on September 5, 2024 and sell it today you would lose (1,050) from holding MCDONALDS P MEDIUM or give up 11.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.53% |
| Values | Daily Returns |
MCDONALDS P MEDIUM vs. Stepan Company
Performance |
| Timeline |
| MCDONALDS P MEDIUM |
| Stepan Company |
58013MFC3 and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 58013MFC3 and Stepan
The main advantage of trading using opposite 58013MFC3 and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 58013MFC3 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.| 58013MFC3 vs. Stepan Company | 58013MFC3 vs. Hafnia Limited | 58013MFC3 vs. Apogee Enterprises | 58013MFC3 vs. JD Sports Fashion |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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