Correlation Between Quaker Chemical and Coroware
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Coroware 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 Coroware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Coroware, you can compare the effects of market volatilities on Quaker Chemical and Coroware 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 Coroware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Coroware.
Diversification Opportunities for Quaker Chemical and Coroware
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quaker and Coroware is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Coroware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coroware 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 Coroware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coroware has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Coroware go up and down completely randomly.
Pair Corralation between Quaker Chemical and Coroware
Considering the 90-day investment horizon Quaker Chemical is expected to under-perform the Coroware. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 113.28 times less risky than Coroware. The stock trades about -0.02 of its potential returns per unit of risk. The Coroware is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Coroware on November 27, 2024 and sell it today you would lose (0.01) from holding Coroware or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.6% |
| Values | Daily Returns |
Quaker Chemical vs. Coroware
Performance |
| Timeline |
| Quaker Chemical |
| Coroware |
Quaker Chemical and Coroware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Coroware
The main advantage of trading using opposite Quaker Chemical and Coroware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Coroware 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 Coroware will offset losses from the drop in Coroware's long position.| Quaker Chemical vs. Minerals Technologies | Quaker Chemical vs. Innospec | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Cabot |
| Coroware vs. Avoca LLC | Coroware vs. Nocopi Technologies | Coroware vs. Blue Biofuels | Coroware vs. Lhyfe SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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