Correlation Between 197677AH0 and Stepan

Can any of the company-specific risk be diversified away by investing in both 197677AH0 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 197677AH0 and Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HCA 75 percent and Stepan Company, you can compare the effects of market volatilities on 197677AH0 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 197677AH0 with a short position of Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of 197677AH0 and Stepan.

Diversification Opportunities for 197677AH0 and Stepan

-0.07

Correlation Coefficient

197677AH0  Stepan

Good diversification

The 3 months correlation between 197677AH0 and Stepan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding HCA 75 percent and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company and 197677AH0 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 HCA 75 percent 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 197677AH0 i.e., 197677AH0 and Stepan go up and down completely randomly.

Pair Corralation between 197677AH0 and Stepan

Assuming the 90 days trading horizon 197677AH0 is expected to generate 7.32 times less return on investment than Stepan. In addition to that, 197677AH0 is 1.41 times more volatile than Stepan Company. It trades about 0.0 of its total potential returns per unit of risk. Stepan Company is currently generating about 0.05 per unit of volatility. If you would invest  7,382  in Stepan Company on September 4, 2024 and sell it today you would earn a total of  320.00  from holding Stepan Company or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

HCA 75 percent  vs.  Stepan Company

HCA 75 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HCA 75 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 197677AH0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Stepan Company

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stepan Company are ranked lower than 3 (%) 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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with 197677AH0 and Stepan

The main advantage of trading using opposite 197677AH0 and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 197677AH0 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 HCA 75 percent 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.