Correlation Between AIR PRODCHEMICALS and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Quaker Chemical, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Quaker Chemical.
Diversification Opportunities for AIR PRODCHEMICALS and Quaker Chemical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AIR and Quaker is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Quaker Chemical go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Quaker Chemical
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.79 times more return on investment than Quaker Chemical. However, AIR PRODCHEMICALS is 1.27 times less risky than Quaker Chemical. It trades about 0.03 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.01 per unit of risk. If you would invest 27,356 in AIR PRODCHEMICALS on August 28, 2024 and sell it today you would earn a total of 4,254 from holding AIR PRODCHEMICALS or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Quaker Chemical
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Quaker Chemical |
AIR PRODCHEMICALS and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Quaker Chemical
The main advantage of trading using opposite AIR PRODCHEMICALS and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Microsoft | AIR PRODCHEMICALS vs. Microsoft |
| Quaker Chemical vs. Albemarle | Quaker Chemical vs. Superior Plus Corp | Quaker Chemical vs. NMI Holdings | Quaker Chemical vs. Origin Agritech |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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