Correlation Between Genertec Universal and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Genertec Universal 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 Genertec Universal and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genertec Universal Medical and Quaker Chemical, you can compare the effects of market volatilities on Genertec Universal 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 Genertec Universal with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genertec Universal and Quaker Chemical.
Diversification Opportunities for Genertec Universal and Quaker Chemical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genertec and Quaker is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Genertec Universal 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 Genertec Universal Medical 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 Genertec Universal i.e., Genertec Universal and Quaker Chemical go up and down completely randomly.
Pair Corralation between Genertec Universal and Quaker Chemical
Assuming the 90 days horizon Genertec Universal Medical is expected to generate 0.79 times more return on investment than Quaker Chemical. However, Genertec Universal Medical is 1.26 times less risky than Quaker Chemical. It trades about 0.14 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.02 per unit of risk. If you would invest 57.00 in Genertec Universal Medical on October 29, 2024 and sell it today you would earn a total of 2.00 from holding Genertec Universal Medical or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genertec Universal Medical vs. Quaker Chemical
Performance |
| Timeline |
| Genertec Universal |
| Quaker Chemical |
Genertec Universal and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genertec Universal and Quaker Chemical
The main advantage of trading using opposite Genertec Universal and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genertec Universal 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.| Genertec Universal vs. Fast Retailing Co | Genertec Universal vs. PICKN PAY STORES | Genertec Universal vs. CHINA TONTINE WINES | Genertec Universal vs. SALESFORCE INC CDR |
| Quaker Chemical vs. Scandinavian Tobacco Group | Quaker Chemical vs. Align Technology | Quaker Chemical vs. Vishay Intertechnology | Quaker Chemical vs. SCOTT TECHNOLOGY |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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