Correlation Between Stepan and Maquia Capital

Can any of the company-specific risk be diversified away by investing in both Stepan and Maquia Capital 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 Stepan and Maquia Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stepan Company and Maquia Capital Acquisition, you can compare the effects of market volatilities on Stepan and Maquia Capital 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 Stepan with a short position of Maquia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Maquia Capital.

Diversification Opportunities for Stepan and Maquia Capital

0.12

Correlation Coefficient

Stepan  Maquia Capital

Average diversification

The 3 months correlation between Stepan and Maquia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Maquia Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maquia Capital Acqui and Stepan 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 Stepan Company are associated (or correlated) with Maquia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maquia Capital Acqui has no effect on the direction of Stepan i.e., Stepan and Maquia Capital go up and down completely randomly.

Pair Corralation between Stepan and Maquia Capital

If you would invest  7,419  in Stepan Company on September 14, 2024 and sell it today you would lose (5.00) from holding Stepan Company or give up 0.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Stepan Company  vs.  Maquia Capital Acquisition

Stepan Company

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Stepan Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Stepan is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Maquia Capital Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maquia Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Maquia Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stepan and Maquia Capital

The main advantage of trading using opposite Stepan and Maquia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Maquia Capital 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 Maquia Capital will offset losses from the drop in Maquia Capital's long position.

The idea behind Stepan Company and Maquia Capital Acquisition 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..