Correlation Between TERADATA and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both TERADATA and Quaker Chemical 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 TERADATA and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TERADATA and Quaker Chemical, you can compare the effects of market volatilities on TERADATA and Quaker Chemical 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 TERADATA with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and Quaker Chemical.
Diversification Opportunities for TERADATA and Quaker Chemical
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TERADATA and Quaker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and TERADATA 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 TERADATA are associated (or correlated) with Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of TERADATA i.e., TERADATA and Quaker Chemical go up and down completely randomly.
Pair Corralation between TERADATA and Quaker Chemical
Assuming the 90 days trading horizon TERADATA is expected to generate 0.58 times more return on investment than Quaker Chemical. However, TERADATA is 1.72 times less risky than Quaker Chemical. It trades about 0.47 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.36 per unit of risk. If you would invest 2,820 in TERADATA on September 22, 2024 and sell it today you would earn a total of 260.00 from holding TERADATA or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TERADATA vs. Quaker Chemical
Performance |
| Timeline |
| TERADATA |
| Quaker Chemical |
TERADATA and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TERADATA and Quaker Chemical
The main advantage of trading using opposite TERADATA and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.The idea behind TERADATA and Quaker Chemical 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.| Quaker Chemical vs. TERADATA | Quaker Chemical vs. Datang International Power | Quaker Chemical vs. Science Applications International | Quaker Chemical vs. Automatic Data Processing |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |