Correlation Between TRPCN and Stepan
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By analyzing existing cross correlation between TRPCN 5875 15 AUG 76 and Stepan Company, you can compare the effects of market volatilities on TRPCN 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 TRPCN with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRPCN and Stepan.
Diversification Opportunities for TRPCN and Stepan
Significant diversification
The 3 months correlation between TRPCN and Stepan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TRPCN 5875 15 AUG 76 and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and TRPCN 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 TRPCN 5875 15 AUG 76 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 TRPCN i.e., TRPCN and Stepan go up and down completely randomly.
Pair Corralation between TRPCN and Stepan
Assuming the 90 days trading horizon TRPCN 5875 15 AUG 76 is expected to generate 0.33 times more return on investment than Stepan. However, TRPCN 5875 15 AUG 76 is 3.04 times less risky than Stepan. It trades about -0.2 of its potential returns per unit of risk. Stepan Company is currently generating about -0.09 per unit of risk. If you would invest 9,956 in TRPCN 5875 15 AUG 76 on September 14, 2024 and sell it today you would lose (169.00) from holding TRPCN 5875 15 AUG 76 or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TRPCN 5875 15 AUG 76 vs. Stepan Company
Performance |
| Timeline |
| TRPCN 5875 15 |
| Stepan Company |
TRPCN and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRPCN and Stepan
The main advantage of trading using opposite TRPCN and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRPCN 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.The idea behind TRPCN 5875 15 AUG 76 and Stepan Company 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.| Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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