Correlation Between Quaker Chemical and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Strategic Investments AS, you can compare the effects of market volatilities on Quaker Chemical and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Strategic Investments.
Diversification Opportunities for Quaker Chemical and Strategic Investments
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quaker and Strategic is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Strategic Investments go up and down completely randomly.
Pair Corralation between Quaker Chemical and Strategic Investments
Assuming the 90 days horizon Quaker Chemical is expected to generate 0.51 times more return on investment than Strategic Investments. However, Quaker Chemical is 1.96 times less risky than Strategic Investments. It trades about 0.16 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.08 per unit of risk. If you would invest 14,200 in Quaker Chemical on August 28, 2024 and sell it today you would earn a total of 1,600 from holding Quaker Chemical or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Strategic Investments AS
Performance |
| Timeline |
| Quaker Chemical |
| Strategic Investments |
Quaker Chemical and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Strategic Investments
The main advantage of trading using opposite Quaker Chemical and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Quaker Chemical vs. Albemarle | Quaker Chemical vs. Superior Plus Corp | Quaker Chemical vs. NMI Holdings | Quaker Chemical vs. Origin Agritech |
| Strategic Investments vs. The Bank of | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings | Strategic Investments vs. Origin Agritech |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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