Correlation Between Graphene Manufacturing and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing 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 Graphene Manufacturing and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphene Manufacturing Group and Quaker Chemical, you can compare the effects of market volatilities on Graphene Manufacturing 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 Graphene Manufacturing with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and Quaker Chemical.
Diversification Opportunities for Graphene Manufacturing and Quaker Chemical
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphene and Quaker is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Graphene Manufacturing 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 Graphene Manufacturing Group 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 Graphene Manufacturing i.e., Graphene Manufacturing and Quaker Chemical go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and Quaker Chemical
Assuming the 90 days horizon Graphene Manufacturing Group is expected to under-perform the Quaker Chemical. In addition to that, Graphene Manufacturing is 3.15 times more volatile than Quaker Chemical. It trades about -0.03 of its total potential returns per unit of risk. Quaker Chemical is currently generating about -0.03 per unit of volatility. If you would invest 18,848 in Quaker Chemical on August 28, 2024 and sell it today you would lose (2,594) from holding Quaker Chemical or give up 13.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. Quaker Chemical
Performance |
| Timeline |
| Graphene Manufacturing |
| Quaker Chemical |
Graphene Manufacturing and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and Quaker Chemical
The main advantage of trading using opposite Graphene Manufacturing and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing 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.| Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
| Quaker Chemical vs. Oil Dri | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Northern Technologies | 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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