Correlation Between Quaker Chemical and Chegg
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Chegg 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 Chegg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Chegg Inc, you can compare the effects of market volatilities on Quaker Chemical and Chegg 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 Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Chegg.
Diversification Opportunities for Quaker Chemical and Chegg
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Quaker and Chegg is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc 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 Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Chegg go up and down completely randomly.
Pair Corralation between Quaker Chemical and Chegg
Assuming the 90 days horizon Quaker Chemical is expected to generate 0.34 times more return on investment than Chegg. However, Quaker Chemical is 2.91 times less risky than Chegg. It trades about -0.02 of its potential returns per unit of risk. Chegg Inc is currently generating about -0.02 per unit of risk. If you would invest 16,101 in Quaker Chemical on September 5, 2024 and sell it today you would lose (1,201) from holding Quaker Chemical or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Quaker Chemical vs. Chegg Inc
Performance |
| Timeline |
| Quaker Chemical |
| Chegg Inc |
Quaker Chemical and Chegg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Chegg
The main advantage of trading using opposite Quaker Chemical and Chegg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Chegg 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 Chegg will offset losses from the drop in Chegg's long position.| Quaker Chemical vs. PARKEN Sport Entertainment | Quaker Chemical vs. COMBA TELECOM SYST | Quaker Chemical vs. Scandinavian Tobacco Group | Quaker Chemical vs. Ming Le Sports |
| Chegg vs. AM EAGLE OUTFITTERS | Chegg vs. American Eagle Outfitters | Chegg vs. ANTA SPORTS PRODUCT | Chegg vs. PT Global Mediacom |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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