Correlation Between Quaker Chemical and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Flexible Solutions 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 Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Flexible Solutions International, you can compare the effects of market volatilities on Quaker Chemical and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Flexible Solutions.
Diversification Opportunities for Quaker Chemical and Flexible Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Quaker and Flexible is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Flexible Solutions go up and down completely randomly.
Pair Corralation between Quaker Chemical and Flexible Solutions
Considering the 90-day investment horizon Quaker Chemical is expected to generate 0.76 times more return on investment than Flexible Solutions. However, Quaker Chemical is 1.31 times less risky than Flexible Solutions. It trades about 0.04 of its potential returns per unit of risk. Flexible Solutions International is currently generating about -0.01 per unit of risk. If you would invest 15,450 in Quaker Chemical on August 29, 2024 and sell it today you would earn a total of 330.00 from holding Quaker Chemical or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Flexible Solutions Internation
Performance |
| Timeline |
| Quaker Chemical |
| Flexible Solutions |
Quaker Chemical and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Flexible Solutions
The main advantage of trading using opposite Quaker Chemical and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Quaker Chemical vs. Oil Dri | Quaker Chemical vs. H B Fuller | Quaker Chemical vs. Northern Technologies | Quaker Chemical vs. Cabot |
| Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies | Flexible Solutions vs. Cabot |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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