Correlation Between Quaker Chemical and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and APPLIED MATERIALS 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 APPLIED MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and APPLIED MATERIALS, you can compare the effects of market volatilities on Quaker Chemical and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and APPLIED MATERIALS.
Diversification Opportunities for Quaker Chemical and APPLIED MATERIALS
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quaker and APPLIED is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Quaker Chemical and APPLIED MATERIALS
Assuming the 90 days horizon Quaker Chemical is expected to generate 1.34 times less return on investment than APPLIED MATERIALS. But when comparing it to its historical volatility, Quaker Chemical is 1.66 times less risky than APPLIED MATERIALS. It trades about 0.04 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 17,196 in APPLIED MATERIALS on November 7, 2024 and sell it today you would earn a total of 176.00 from holding APPLIED MATERIALS or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Quaker Chemical vs. APPLIED MATERIALS
Performance |
| Timeline |
| Quaker Chemical |
| APPLIED MATERIALS |
Quaker Chemical and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and APPLIED MATERIALS
The main advantage of trading using opposite Quaker Chemical and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Quaker Chemical vs. Linde plc | Quaker Chemical vs. Linde PLC | Quaker Chemical vs. Air Liquide SA | Quaker Chemical vs. The Sherwin Williams |
| APPLIED MATERIALS vs. ANTA SPORTS PRODUCT | APPLIED MATERIALS vs. G III Apparel Group | APPLIED MATERIALS vs. PLAY2CHILL SA ZY | APPLIED MATERIALS vs. ARISTOCRAT LEISURE |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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