Correlation Between Stepan and 92928QAD0

Can any of the company-specific risk be diversified away by investing in both Stepan and 92928QAD0 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 92928QAD0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stepan Company and ULFP 4625 20 SEP 48, you can compare the effects of market volatilities on Stepan and 92928QAD0 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 92928QAD0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and 92928QAD0.

Diversification Opportunities for Stepan and 92928QAD0

0.02

Correlation Coefficient

Stepan  92928QAD0

Significant diversification

The 3 months correlation between Stepan and 92928QAD0 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and ULFP 4625 20 SEP 48 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULFP 4625 20 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 92928QAD0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULFP 4625 20 has no effect on the direction of Stepan i.e., Stepan and 92928QAD0 go up and down completely randomly.

Pair Corralation between Stepan and 92928QAD0

Considering the 90-day investment horizon Stepan Company is expected to generate 0.6 times more return on investment than 92928QAD0. However, Stepan Company is 1.67 times less risky than 92928QAD0. It trades about 0.03 of its potential returns per unit of risk. ULFP 4625 20 SEP 48 is currently generating about -0.17 per unit of risk. If you would invest  7,344  in Stepan Company on September 13, 2024 and sell it today you would earn a total of  206.00  from holding Stepan Company or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	44.44%
Values	Daily Returns

Stepan Company  vs.  ULFP 4625 20 SEP 48

Stepan Company

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stepan Company are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

ULFP 4625 20

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ULFP 4625 20 SEP 48 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ULFP 4625 20 SEP 48 investors.

Pair Trading with Stepan and 92928QAD0

The main advantage of trading using opposite Stepan and 92928QAD0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, 92928QAD0 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 92928QAD0 will offset losses from the drop in 92928QAD0's long position.

The idea behind Stepan Company and ULFP 4625 20 SEP 48 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.