Correlation Between Quaker Chemical and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and SAN MIGUEL 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 SAN MIGUEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and SAN MIGUEL BREWERY, you can compare the effects of market volatilities on Quaker Chemical and SAN MIGUEL 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 SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and SAN MIGUEL.
Diversification Opportunities for Quaker Chemical and SAN MIGUEL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quaker and SAN is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and SAN MIGUEL BREWERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAN MIGUEL BREWERY 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 SAN MIGUEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAN MIGUEL BREWERY has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and SAN MIGUEL go up and down completely randomly.
Pair Corralation between Quaker Chemical and SAN MIGUEL
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the SAN MIGUEL. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.48 times less risky than SAN MIGUEL. The stock trades about 0.0 of its potential returns per unit of risk. The SAN MIGUEL BREWERY is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10.00 in SAN MIGUEL BREWERY on October 27, 2024 and sell it today you would earn a total of 1.00 from holding SAN MIGUEL BREWERY or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| Quaker Chemical |
| SAN MIGUEL BREWERY |
Quaker Chemical and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and SAN MIGUEL
The main advantage of trading using opposite Quaker Chemical and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, SAN MIGUEL 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 SAN MIGUEL will offset losses from the drop in SAN MIGUEL's long position.| Quaker Chemical vs. Insurance Australia Group | Quaker Chemical vs. The Hanover Insurance | Quaker Chemical vs. HANOVER INSURANCE | Quaker Chemical vs. Zurich Insurance Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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