Correlation Between Quaker Chemical and BioNexus Gene
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and BioNexus Gene 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 Quaker Chemical and BioNexus Gene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and BioNexus Gene Lab, you can compare the effects of market volatilities on Quaker Chemical and BioNexus Gene 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 Quaker Chemical with a short position of BioNexus Gene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and BioNexus Gene.
Diversification Opportunities for Quaker Chemical and BioNexus Gene
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Quaker and BioNexus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and BioNexus Gene Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNexus Gene Lab and Quaker Chemical 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 Quaker Chemical are associated (or correlated) with BioNexus Gene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNexus Gene Lab has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and BioNexus Gene go up and down completely randomly.
Pair Corralation between Quaker Chemical and BioNexus Gene
Considering the 90-day investment horizon Quaker Chemical is expected to generate 4016.66 times less return on investment than BioNexus Gene. But when comparing it to its historical volatility, Quaker Chemical is 89.1 times less risky than BioNexus Gene. It trades about 0.0 of its potential returns per unit of risk. BioNexus Gene Lab is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 98.00 in BioNexus Gene Lab on September 5, 2024 and sell it today you would lose (67.00) from holding BioNexus Gene Lab or give up 68.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. BioNexus Gene Lab
Performance |
| Timeline |
| Quaker Chemical |
| BioNexus Gene Lab |
Quaker Chemical and BioNexus Gene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and BioNexus Gene
The main advantage of trading using opposite Quaker Chemical and BioNexus Gene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, BioNexus Gene 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 BioNexus Gene will offset losses from the drop in BioNexus Gene's long position.The idea behind Quaker Chemical and BioNexus Gene Lab pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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