Correlation Between ASSOC BR and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both ASSOC BR 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 ASSOC BR and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSOC BR FOODS and Quaker Chemical, you can compare the effects of market volatilities on ASSOC BR 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 ASSOC BR with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSOC BR and Quaker Chemical.
Diversification Opportunities for ASSOC BR and Quaker Chemical
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASSOC and Quaker is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ASSOC BR FOODS and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and ASSOC BR 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 ASSOC BR FOODS 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 ASSOC BR i.e., ASSOC BR and Quaker Chemical go up and down completely randomly.
Pair Corralation between ASSOC BR and Quaker Chemical
Assuming the 90 days trading horizon ASSOC BR FOODS is expected to generate 1.06 times more return on investment than Quaker Chemical. However, ASSOC BR is 1.06 times more volatile than Quaker Chemical. It trades about 0.02 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.23 per unit of risk. If you would invest 2,489 in ASSOC BR FOODS on September 20, 2024 and sell it today you would earn a total of 11.00 from holding ASSOC BR FOODS or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASSOC BR FOODS vs. Quaker Chemical
Performance |
| Timeline |
| ASSOC BR FOODS |
| Quaker Chemical |
ASSOC BR and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSOC BR and Quaker Chemical
The main advantage of trading using opposite ASSOC BR and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSOC BR 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.| ASSOC BR vs. Superior Plus Corp | ASSOC BR vs. SIVERS SEMICONDUCTORS AB | ASSOC BR vs. NorAm Drilling AS | ASSOC BR vs. Norsk Hydro ASA |
| Quaker Chemical vs. International Consolidated Airlines | Quaker Chemical vs. Nok Airlines PCL | Quaker Chemical vs. ANTA SPORTS PRODUCT | Quaker Chemical vs. EPSILON HEALTHCARE LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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