Correlation Between Ecolab and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Ecolab 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 Ecolab and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Quaker Chemical, you can compare the effects of market volatilities on Ecolab 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 Ecolab with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Quaker Chemical.
Diversification Opportunities for Ecolab and Quaker Chemical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecolab and Quaker is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Ecolab 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 Ecolab Inc 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 Ecolab i.e., Ecolab and Quaker Chemical go up and down completely randomly.
Pair Corralation between Ecolab and Quaker Chemical
Considering the 90-day investment horizon Ecolab Inc is expected to under-perform the Quaker Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Ecolab Inc is 3.48 times less risky than Quaker Chemical. The stock trades about -0.28 of its potential returns per unit of risk. The Quaker Chemical is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 15,500 in Quaker Chemical on August 24, 2024 and sell it today you would earn a total of 1,145 from holding Quaker Chemical or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Quaker Chemical
Performance |
| Timeline |
| Ecolab Inc |
| Quaker Chemical |
Ecolab and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Quaker Chemical
The main advantage of trading using opposite Ecolab and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab 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.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |