Correlation Between Quaker Chemical and Core Molding
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Core Molding 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 Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Core Molding Technologies, you can compare the effects of market volatilities on Quaker Chemical and Core Molding 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 Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Core Molding.
Diversification Opportunities for Quaker Chemical and Core Molding
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quaker and Core is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies 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 Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Core Molding go up and down completely randomly.
Pair Corralation between Quaker Chemical and Core Molding
Considering the 90-day investment horizon Quaker Chemical is expected to generate 1.45 times less return on investment than Core Molding. In addition to that, Quaker Chemical is 1.04 times more volatile than Core Molding Technologies. It trades about 0.11 of its total potential returns per unit of risk. Core Molding Technologies is currently generating about 0.16 per unit of volatility. If you would invest 1,580 in Core Molding Technologies on August 27, 2024 and sell it today you would earn a total of 170.00 from holding Core Molding Technologies or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Core Molding Technologies
Performance |
| Timeline |
| Quaker Chemical |
| Core Molding Technologies |
Quaker Chemical and Core Molding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Core Molding
The main advantage of trading using opposite Quaker Chemical and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.| Quaker Chemical vs. Oil Dri | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Northern Technologies | Quaker Chemical vs. Cabot |
| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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