Correlation Between Quaker Chemical and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on Quaker Chemical and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and CHEMICAL INDUSTRIES.
Diversification Opportunities for Quaker Chemical and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Quaker and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between Quaker Chemical and CHEMICAL INDUSTRIES
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the CHEMICAL INDUSTRIES. In addition to that, Quaker Chemical is 8.07 times more volatile than CHEMICAL INDUSTRIES. It trades about -0.01 of its total potential returns per unit of risk. CHEMICAL INDUSTRIES is currently generating about 0.06 per unit of volatility. If you would invest 40.00 in CHEMICAL INDUSTRIES on September 1, 2024 and sell it today you would earn a total of 3.00 from holding CHEMICAL INDUSTRIES or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| Quaker Chemical |
| CHEMICAL INDUSTRIES |
Quaker Chemical and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and CHEMICAL INDUSTRIES
The main advantage of trading using opposite Quaker Chemical and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.| Quaker Chemical vs. Transport International Holdings | Quaker Chemical vs. TSOGO SUN GAMING | Quaker Chemical vs. Air Transport Services | Quaker Chemical vs. EVS Broadcast Equipment |
| CHEMICAL INDUSTRIES vs. Retail Estates NV | CHEMICAL INDUSTRIES vs. MOLSON RS BEVERAGE | CHEMICAL INDUSTRIES vs. Monster Beverage Corp | CHEMICAL INDUSTRIES vs. Ross Stores |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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