Correlation Between Usio and Stepan
Can any of the company-specific risk be diversified away by investing in both Usio and Stepan 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 Usio and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usio Inc and Stepan Company, you can compare the effects of market volatilities on Usio 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 Usio with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usio and Stepan.
Diversification Opportunities for Usio and Stepan
Average diversification
The 3 months correlation between Usio and Stepan is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Usio 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 Usio Inc 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 Usio i.e., Usio and Stepan go up and down completely randomly.
Pair Corralation between Usio and Stepan
Given the investment horizon of 90 days Usio Inc is expected to generate 1.41 times more return on investment than Stepan. However, Usio is 1.41 times more volatile than Stepan Company. It trades about 0.0 of its potential returns per unit of risk. Stepan Company is currently generating about -0.02 per unit of risk. If you would invest 160.00 in Usio Inc on September 4, 2024 and sell it today you would lose (13.00) from holding Usio Inc or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usio Inc vs. Stepan Company
Performance |
| Timeline |
| Usio Inc |
| Stepan Company |
Usio and Stepan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usio and Stepan
The main advantage of trading using opposite Usio and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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.| Usio vs. Appen Limited | Usio vs. Value Exchange International | Usio vs. Appen Limited | Usio vs. Deveron Corp |
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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