Correlation Between Quaker Chemical and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and WT OFFSHORE 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 WT OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and WT OFFSHORE, you can compare the effects of market volatilities on Quaker Chemical and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and WT OFFSHORE.
Diversification Opportunities for Quaker Chemical and WT OFFSHORE
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quaker and UWV is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Quaker Chemical and WT OFFSHORE
Assuming the 90 days horizon Quaker Chemical is expected to generate 0.78 times more return on investment than WT OFFSHORE. However, Quaker Chemical is 1.28 times less risky than WT OFFSHORE. It trades about 0.08 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.07 per unit of risk. If you would invest 12,951 in Quaker Chemical on November 8, 2024 and sell it today you would earn a total of 449.00 from holding Quaker Chemical or generate 3.47% 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. WT OFFSHORE
Performance |
| Timeline |
| Quaker Chemical |
| WT OFFSHORE |
Quaker Chemical and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and WT OFFSHORE
The main advantage of trading using opposite Quaker Chemical and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Quaker Chemical vs. X FAB Silicon Foundries | Quaker Chemical vs. CARDINAL HEALTH | Quaker Chemical vs. OPKO HEALTH | Quaker Chemical vs. Molina Healthcare |
| WT OFFSHORE vs. MAGNUM MINING EXP | WT OFFSHORE vs. ALBIS LEASING AG | WT OFFSHORE vs. Perseus Mining Limited | WT OFFSHORE vs. CORNISH METALS INC |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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