Correlation Between Sky440 and Stepan

Can any of the company-specific risk be diversified away by investing in both Sky440 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 Sky440 and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sky440 Inc and Stepan Company, you can compare the effects of market volatilities on Sky440 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 Sky440 with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky440 and Stepan.

Diversification Opportunities for Sky440 and Stepan

0.0

Correlation Coefficient

Sky440  Stepan

Pay attention - limited upside

The 3 months correlation between Sky440 and Stepan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sky440 Inc and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and Sky440 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 Sky440 Inc 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 Sky440 i.e., Sky440 and Stepan go up and down completely randomly.

Pair Corralation between Sky440 and Stepan

If you would invest  0.01  in Sky440 Inc on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Sky440 Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Sky440 Inc  vs.  Stepan Company

Sky440 Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sky440 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sky440 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest weak performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Sky440 and Stepan

The main advantage of trading using opposite Sky440 and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky440 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 Sky440 Inc 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.