Correlation Between Quaker Chemical and John Bean
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and John Bean 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 John Bean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and John Bean Technologies, you can compare the effects of market volatilities on Quaker Chemical and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and John Bean.
Diversification Opportunities for Quaker Chemical and John Bean
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quaker and John is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and John Bean go up and down completely randomly.
Pair Corralation between Quaker Chemical and John Bean
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the John Bean. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.08 times less risky than John Bean. The stock trades about -0.01 of its potential returns per unit of risk. The John Bean Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10,143 in John Bean Technologies on September 12, 2024 and sell it today you would earn a total of 1,157 from holding John Bean Technologies or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Quaker Chemical vs. John Bean Technologies
Performance |
| Timeline |
| Quaker Chemical |
| John Bean Technologies |
Quaker Chemical and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and John Bean
The main advantage of trading using opposite Quaker Chemical and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean'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 |
| John Bean vs. Japan Post Insurance | John Bean vs. China BlueChemical | John Bean vs. Goosehead Insurance | John Bean vs. Quaker 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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