Correlation Between Stepan and High Roller

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

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

Diversification Opportunities for Stepan and High Roller

-0.1

Correlation Coefficient

Stepan  High Roller

Good diversification

The 3 months correlation between Stepan and High is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and High Roller Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Roller Technologies, 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 High Roller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Roller Technologies, has no effect on the direction of Stepan i.e., Stepan and High Roller go up and down completely randomly.

Pair Corralation between Stepan and High Roller

Considering the 90-day investment horizon Stepan Company is expected to under-perform the High Roller. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 7.94 times less risky than High Roller. The stock trades about -0.04 of its potential returns per unit of risk. The High Roller Technologies, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  512.00  in High Roller Technologies, on September 16, 2024 and sell it today you would earn a total of  76.00  from holding High Roller Technologies, or generate 14.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Stepan Company  vs.  High Roller Technologies,

Stepan Company

Risk-Adjusted Performance

0 of 100

Very 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.

High Roller Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Roller Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Stepan and High Roller

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

The idea behind Stepan Company and High Roller Technologies, 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 Commodity Directory module to find actively traded commodities issued by global exchanges.