Correlation Between Insurance Australia and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Insurance Australia 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 Insurance Australia and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and Quaker Chemical, you can compare the effects of market volatilities on Insurance Australia 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 Insurance Australia with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Quaker Chemical.
Diversification Opportunities for Insurance Australia and Quaker Chemical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insurance and Quaker is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Insurance Australia 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 Insurance Australia Group 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 Insurance Australia i.e., Insurance Australia and Quaker Chemical go up and down completely randomly.
Pair Corralation between Insurance Australia and Quaker Chemical
Assuming the 90 days horizon Insurance Australia Group is expected to generate 0.69 times more return on investment than Quaker Chemical. However, Insurance Australia Group is 1.46 times less risky than Quaker Chemical. It trades about 0.21 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.0 per unit of risk. If you would invest 500.00 in Insurance Australia Group on October 28, 2024 and sell it today you would earn a total of 25.00 from holding Insurance Australia Group or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Quaker Chemical
Performance |
| Timeline |
| Insurance Australia |
| Quaker Chemical |
Insurance Australia and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Quaker Chemical
The main advantage of trading using opposite Insurance Australia and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia 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.| Insurance Australia vs. OFFICE DEPOT | Insurance Australia vs. Sumitomo Rubber Industries | Insurance Australia vs. Compagnie Plastic Omnium | Insurance Australia vs. Applied Materials |
| Quaker Chemical vs. ANTA SPORTS PRODUCT | Quaker Chemical vs. MeVis Medical Solutions | Quaker Chemical vs. Genertec Universal Medical | Quaker Chemical vs. Air Transport Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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