Correlation Between Stepan and Xylo Technologies
Can any of the company-specific risk be diversified away by investing in both Stepan and Xylo Technologies 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 Xylo Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepan Company and Xylo Technologies, you can compare the effects of market volatilities on Stepan and Xylo Technologies 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 Xylo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepan and Xylo Technologies.
Diversification Opportunities for Stepan and Xylo Technologies
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stepan and Xylo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Xylo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylo 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 Xylo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylo Technologies has no effect on the direction of Stepan i.e., Stepan and Xylo Technologies go up and down completely randomly.
Pair Corralation between Stepan and Xylo Technologies
Considering the 90-day investment horizon Stepan Company is expected to under-perform the Xylo Technologies. In addition to that, Stepan is 1.13 times more volatile than Xylo Technologies. It trades about -0.04 of its total potential returns per unit of risk. Xylo Technologies is currently generating about 0.06 per unit of volatility. If you would invest 479.00 in Xylo Technologies on June 5, 2025 and sell it today you would earn a total of 28.00 from holding Xylo Technologies or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.8% |
| Values | Daily Returns |
Stepan Company vs. Xylo Technologies
Performance |
| Timeline |
| Stepan Company |
| Xylo Technologies |
Risk-Adjusted Performance
Soft
Weak | Strong |
Stepan and Xylo Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepan and Xylo Technologies
The main advantage of trading using opposite Stepan and Xylo Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan position performs unexpectedly, Xylo Technologies 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 Xylo Technologies will offset losses from the drop in Xylo Technologies' long position.| Stepan vs. Core Molding Technologies | Stepan vs. Neo Performance Materials | Stepan vs. Avient Corp | Stepan vs. SPAR Group |
| Xylo Technologies vs. Gentex | Xylo Technologies vs. Estee Lauder Companies | Xylo Technologies vs. Iridium Communications | Xylo Technologies vs. Cheche Group Class |
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 Stocks Directory module to find actively traded stocks across global markets.
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