Correlation Between COMBA TELECOM and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Quaker Chemical, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Quaker Chemical.
Diversification Opportunities for COMBA TELECOM and Quaker Chemical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and Quaker is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Quaker Chemical go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Quaker Chemical
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 1.03 times more return on investment than Quaker Chemical. However, COMBA TELECOM is 1.03 times more volatile than Quaker Chemical. It trades about -0.21 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.27 per unit of risk. If you would invest 13.00 in COMBA TELECOM SYST on September 13, 2024 and sell it today you would lose (1.00) from holding COMBA TELECOM SYST or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Quaker Chemical
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Quaker Chemical |
COMBA TELECOM and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Quaker Chemical
The main advantage of trading using opposite COMBA TELECOM and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.| COMBA TELECOM vs. MUTUIONLINE | COMBA TELECOM vs. CarsalesCom | COMBA TELECOM vs. Sekisui Chemical Co | COMBA TELECOM vs. PRECISION DRILLING P |
| Quaker Chemical vs. ScanSource | Quaker Chemical vs. BlueScope Steel Limited | Quaker Chemical vs. KRAKATAU STEEL B | Quaker Chemical vs. Khiron Life Sciences |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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