Correlation Between Quaker Chemical and Kering SA
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Kering SA, you can compare the effects of market volatilities on Quaker Chemical and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Kering SA.
Diversification Opportunities for Quaker Chemical and Kering SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quaker and Kering is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Kering SA go up and down completely randomly.
Pair Corralation between Quaker Chemical and Kering SA
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the Kering SA. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.18 times less risky than Kering SA. The stock trades about -0.08 of its potential returns per unit of risk. The Kering SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 28,140 in Kering SA on October 26, 2024 and sell it today you would lose (3,645) from holding Kering SA or give up 12.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. Kering SA
Performance |
| Timeline |
| Quaker Chemical |
| Kering SA |
Quaker Chemical and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and Kering SA
The main advantage of trading using opposite Quaker Chemical and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Quaker Chemical vs. Linde plc | Quaker Chemical vs. Linde PLC | Quaker Chemical vs. Air Liquide SA | Quaker Chemical vs. The Sherwin Williams |
| Kering SA vs. Ultra Clean Holdings | Kering SA vs. MARKET VECTR RETAIL | Kering SA vs. BJs Wholesale Club | Kering SA vs. Carnegie Clean Energy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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