Correlation Between Quaker Chemical and Allstate
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Allstate 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 Allstate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and The Allstate, you can compare the effects of market volatilities on Quaker Chemical and Allstate 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 Allstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Allstate.
Diversification Opportunities for Quaker Chemical and Allstate
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quaker and Allstate is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and The Allstate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate 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 Allstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Allstate go up and down completely randomly.
Pair Corralation between Quaker Chemical and Allstate
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the Allstate. In addition to that, Quaker Chemical is 1.25 times more volatile than The Allstate. It trades about -0.04 of its total potential returns per unit of risk. The Allstate is currently generating about 0.13 per unit of volatility. If you would invest 12,318 in The Allstate on September 12, 2024 and sell it today you would earn a total of 6,867 from holding The Allstate or generate 55.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. The Allstate
Performance |
| Timeline |
| Quaker Chemical |
| Allstate |
Quaker Chemical and Allstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Allstate
The main advantage of trading using opposite Quaker Chemical and Allstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Allstate 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 Allstate will offset losses from the drop in Allstate's long position.| Quaker Chemical vs. Albemarle | Quaker Chemical vs. Superior Plus Corp | Quaker Chemical vs. SIVERS SEMICONDUCTORS AB | Quaker Chemical vs. Norsk Hydro ASA |
| Allstate vs. KINGBOARD CHEMICAL | Allstate vs. Mitsubishi Gas Chemical | Allstate vs. Quaker Chemical | Allstate vs. Eastman Chemical |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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