Correlation Between Stepan and Agrieuro Corp

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

By analyzing existing cross correlation between Stepan Company and Agrieuro Corp, you can compare the effects of market volatilities on Stepan and Agrieuro Corp 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 Agrieuro Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Agrieuro Corp.

Diversification Opportunities for Stepan and Agrieuro Corp

0.0

Correlation Coefficient

Stepan  Agrieuro Corp

Pay attention - limited upside

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

Pair Corralation between Stepan and Agrieuro Corp

If you would invest (100.00) in Agrieuro Corp on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Agrieuro Corp or generate -100.0% return on investment over 90 days.

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

Stepan Company  vs.  Agrieuro Corp

Stepan Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stepan Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Agrieuro Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrieuro Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Agrieuro Corp is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Stepan and Agrieuro Corp

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

The idea behind Stepan Company and Agrieuro Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.