Correlation Between Quaker Chemical and China Coal
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and China Coal 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 China Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and China Coal Energy, you can compare the effects of market volatilities on Quaker Chemical and China Coal 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 China Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and China Coal.
Diversification Opportunities for Quaker Chemical and China Coal
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Quaker and China is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 China Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and China Coal go up and down completely randomly.
Pair Corralation between Quaker Chemical and China Coal
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the China Coal. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.98 times less risky than China Coal. The stock trades about -0.04 of its potential returns per unit of risk. The China Coal Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 52.00 in China Coal Energy on September 14, 2024 and sell it today you would earn a total of 66.00 from holding China Coal Energy or generate 126.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Quaker Chemical vs. China Coal Energy
Performance |
| Timeline |
| Quaker Chemical |
| China Coal Energy |
Quaker Chemical and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and China Coal
The main advantage of trading using opposite Quaker Chemical and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, China Coal 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 China Coal will offset losses from the drop in China Coal's long position.| Quaker Chemical vs. LANDSEA HOMES P | Quaker Chemical vs. FIREWEED METALS P | Quaker Chemical vs. Addus HomeCare | Quaker Chemical vs. Lion One Metals |
| China Coal vs. SPORTING | China Coal vs. Charter Communications | China Coal vs. Verizon Communications | China Coal vs. Iridium Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |