Correlation Between Quaker Chemical and Platinum Group
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Platinum Group 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 Platinum Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Platinum Group Metals, you can compare the effects of market volatilities on Quaker Chemical and Platinum Group 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 Platinum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Platinum Group.
Diversification Opportunities for Quaker Chemical and Platinum Group
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Quaker and Platinum is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Platinum Group go up and down completely randomly.
Pair Corralation between Quaker Chemical and Platinum Group
Assuming the 90 days horizon Quaker Chemical is expected to generate 0.47 times more return on investment than Platinum Group. However, Quaker Chemical is 2.14 times less risky than Platinum Group. It trades about -0.03 of its potential returns per unit of risk. Platinum Group Metals is currently generating about -0.04 per unit of risk. If you would invest 13,350 in Quaker Chemical on October 25, 2024 and sell it today you would lose (150.00) from holding Quaker Chemical or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Quaker Chemical vs. Platinum Group Metals
Performance |
| Timeline |
| Quaker Chemical |
| Platinum Group Metals |
Quaker Chemical and Platinum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Platinum Group
The main advantage of trading using opposite Quaker Chemical and Platinum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Platinum Group 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 Platinum Group will offset losses from the drop in Platinum Group's long position.| Quaker Chemical vs. Broadridge Financial Solutions | Quaker Chemical vs. GRUPO CARSO A1 | Quaker Chemical vs. Texas Roadhouse | Quaker Chemical vs. Grand Canyon Education |
| Platinum Group vs. Scandinavian Tobacco Group | Platinum Group vs. Japan Tobacco | Platinum Group vs. SCOTT TECHNOLOGY | Platinum Group vs. Brockhaus Capital Management |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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