Correlation Between Coroware and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Coroware 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 Coroware and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coroware and Quaker Chemical, you can compare the effects of market volatilities on Coroware 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 Coroware with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coroware and Quaker Chemical.
Diversification Opportunities for Coroware and Quaker Chemical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coroware and Quaker is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Coroware and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Coroware 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 Coroware 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 Coroware i.e., Coroware and Quaker Chemical go up and down completely randomly.
Pair Corralation between Coroware and Quaker Chemical
Given the investment horizon of 90 days Coroware is expected to generate 113.28 times more return on investment than Quaker Chemical. However, Coroware is 113.28 times more volatile than Quaker Chemical. It trades about 0.23 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.02 per unit of risk. If you would invest 0.02 in Coroware on November 27, 2024 and sell it today you would lose (0.01) from holding Coroware or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.6% |
| Values | Daily Returns |
Coroware vs. Quaker Chemical
Performance |
| Timeline |
| Coroware |
| Quaker Chemical |
Coroware and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coroware and Quaker Chemical
The main advantage of trading using opposite Coroware and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coroware 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.| Coroware vs. Avoca LLC | Coroware vs. Nocopi Technologies | Coroware vs. Blue Biofuels | Coroware vs. Lhyfe SA |
| Quaker Chemical vs. Minerals Technologies | Quaker Chemical vs. Innospec | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Cabot |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |