Correlation Between Affiliated Resources and Stephan

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

By analyzing existing cross correlation between Affiliated Resources Corp and The Stephan Co, you can compare the effects of market volatilities on Affiliated Resources and Stephan 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 Affiliated Resources with a short position of Stephan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Stephan.

Diversification Opportunities for Affiliated Resources and Stephan

0.0

Correlation Coefficient

Affiliated Resources  Stephan

Pay attention - limited upside

The 3 months correlation between Affiliated and Stephan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and The Stephan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Stephan and Affiliated Resources 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 Affiliated Resources Corp are associated (or correlated) with Stephan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Stephan has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Stephan go up and down completely randomly.

Pair Corralation between Affiliated Resources and Stephan

If you would invest  5.10  in Affiliated Resources Corp on December 29, 2024 and sell it today you would earn a total of  1.90  from holding Affiliated Resources Corp or generate 37.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Affiliated Resources Corp  vs.  The Stephan Co

Affiliated Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Resources Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Affiliated Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

The Stephan

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Stephan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Stephan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Affiliated Resources and Stephan

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

The idea behind Affiliated Resources Corp and The Stephan Co 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.