Correlation Between Quaker Chemical and Transport International
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Transport International 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 Transport International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Transport International Holdings, you can compare the effects of market volatilities on Quaker Chemical and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Transport International.
Diversification Opportunities for Quaker Chemical and Transport International
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Quaker and Transport is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Transport International go up and down completely randomly.
Pair Corralation between Quaker Chemical and Transport International
Assuming the 90 days horizon Quaker Chemical is expected to generate 1.23 times more return on investment than Transport International. However, Quaker Chemical is 1.23 times more volatile than Transport International Holdings. It trades about 0.01 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.0 per unit of risk. If you would invest 14,652 in Quaker Chemical on September 3, 2024 and sell it today you would lose (52.00) from holding Quaker Chemical or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Transport International Holdin
Performance |
| Timeline |
| Quaker Chemical |
| Transport International |
Quaker Chemical and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Transport International
The main advantage of trading using opposite Quaker Chemical and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.| Quaker Chemical vs. COMMERCIAL VEHICLE | Quaker Chemical vs. MOLSON RS BEVERAGE | Quaker Chemical vs. SENECA FOODS A | Quaker Chemical vs. TYSON FOODS A |
| Transport International vs. Superior Plus Corp | Transport International vs. NMI Holdings | Transport International vs. Origin Agritech | Transport International vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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