Correlation Between Transport International and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Quaker Chemical, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Quaker Chemical.
Diversification Opportunities for Transport International and Quaker Chemical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transport and Quaker is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Quaker Chemical go up and down completely randomly.
Pair Corralation between Transport International and Quaker Chemical
Assuming the 90 days horizon Transport International is expected to generate 3.21 times less return on investment than Quaker Chemical. But when comparing it to its historical volatility, Transport International Holdings is 1.41 times less risky than Quaker Chemical. It trades about 0.03 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14,000 in Quaker Chemical on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Quaker Chemical or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. Quaker Chemical
Performance |
| Timeline |
| Transport International |
| Quaker Chemical |
Transport International and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Quaker Chemical
The main advantage of trading using opposite Transport International and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. Martin Marietta Materials | Transport International vs. Applied Materials | Transport International vs. Materialise NV | Transport International vs. THRACE PLASTICS |
| Quaker Chemical vs. Transport International Holdings | Quaker Chemical vs. TSOGO SUN GAMING | Quaker Chemical vs. Air Transport Services | Quaker Chemical vs. EVS Broadcast Equipment |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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