Correlation Between TenX Keane and Stepan

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

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

Diversification Opportunities for TenX Keane and Stepan

0.03

Correlation Coefficient

TenX Keane  Stepan

Significant diversification

The 3 months correlation between TenX and Stepan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TenX Keane Acquisition and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and TenX Keane 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 TenX Keane Acquisition 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 TenX Keane i.e., TenX Keane and Stepan go up and down completely randomly.

Pair Corralation between TenX Keane and Stepan

Assuming the 90 days horizon TenX Keane Acquisition is expected to generate 16.6 times more return on investment than Stepan. However, TenX Keane is 16.6 times more volatile than Stepan Company. It trades about 0.07 of its potential returns per unit of risk. Stepan Company is currently generating about -0.05 per unit of risk. If you would invest  1,261  in TenX Keane Acquisition on September 13, 2024 and sell it today you would lose (1,261) from holding TenX Keane Acquisition or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.47%
Values	Daily Returns

TenX Keane Acquisition  vs.  Stepan Company

TenX Keane Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Stepan Company

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stepan Company are ranked lower than 1 (%) 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.

Pair Trading with TenX Keane and Stepan

The main advantage of trading using opposite TenX Keane and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TenX Keane 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 TenX Keane Acquisition 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .