Correlation Between Quaker Chemical and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and MACOM Technology 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 MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and MACOM Technology Solutions, you can compare the effects of market volatilities on Quaker Chemical and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and MACOM Technology.
Diversification Opportunities for Quaker Chemical and MACOM Technology
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quaker and MACOM is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and MACOM Technology go up and down completely randomly.
Pair Corralation between Quaker Chemical and MACOM Technology
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the MACOM Technology. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.17 times less risky than MACOM Technology. The stock trades about -0.02 of its potential returns per unit of risk. The MACOM Technology Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,300 in MACOM Technology Solutions on November 6, 2024 and sell it today you would earn a total of 6,400 from holding MACOM Technology Solutions or generate 101.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Quaker Chemical vs. MACOM Technology Solutions
Performance |
| Timeline |
| Quaker Chemical |
| MACOM Technology Sol |
Quaker Chemical and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and MACOM Technology
The main advantage of trading using opposite Quaker Chemical and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| Quaker Chemical vs. Fevertree Drinks PLC | Quaker Chemical vs. Mitsui Chemicals | Quaker Chemical vs. NH Foods | Quaker Chemical vs. EITZEN CHEMICALS |
| MACOM Technology vs. Take Two Interactive Software | MACOM Technology vs. PSI Software AG | MACOM Technology vs. MAG SILVER | MACOM Technology vs. Perseus Mining Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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