Correlation Between Keck Seng and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Keck Seng 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 Keck Seng and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keck Seng Investments and Quaker Chemical, you can compare the effects of market volatilities on Keck Seng 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 Keck Seng with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keck Seng and Quaker Chemical.
Diversification Opportunities for Keck Seng and Quaker Chemical
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Keck and Quaker is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Keck Seng Investments and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Keck Seng 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 Keck Seng Investments 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 Keck Seng i.e., Keck Seng and Quaker Chemical go up and down completely randomly.
Pair Corralation between Keck Seng and Quaker Chemical
Assuming the 90 days horizon Keck Seng Investments is expected to generate 2.76 times more return on investment than Quaker Chemical. However, Keck Seng is 2.76 times more volatile than Quaker Chemical. It trades about 0.06 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.02 per unit of risk. If you would invest 11.00 in Keck Seng Investments on October 16, 2024 and sell it today you would earn a total of 14.00 from holding Keck Seng Investments or generate 127.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keck Seng Investments vs. Quaker Chemical
Performance |
| Timeline |
| Keck Seng Investments |
| Quaker Chemical |
Keck Seng and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keck Seng and Quaker Chemical
The main advantage of trading using opposite Keck Seng and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keck Seng 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.| Keck Seng vs. PLAYMATES TOYS | Keck Seng vs. RETAIL FOOD GROUP | Keck Seng vs. BJs Wholesale Club | Keck Seng vs. TRAVEL LEISURE DL 01 |
| Quaker Chemical vs. GWILLI FOOD | Quaker Chemical vs. Keck Seng Investments | Quaker Chemical vs. INDOFOOD AGRI RES | Quaker Chemical vs. CHRYSALIS INVESTMENTS LTD |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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