Correlation Between Quaker Chemical and X FAB
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and X FAB Silicon Foundries, you can compare the effects of market volatilities on Quaker Chemical and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and X FAB.
Diversification Opportunities for Quaker Chemical and X FAB
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quaker and XFB is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and X FAB go up and down completely randomly.
Pair Corralation between Quaker Chemical and X FAB
Assuming the 90 days horizon Quaker Chemical is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, Quaker Chemical is 1.69 times less risky than X FAB. The stock trades about -0.13 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 476.00 in X FAB Silicon Foundries on October 21, 2024 and sell it today you would earn a total of 34.00 from holding X FAB Silicon Foundries or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quaker Chemical vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Quaker Chemical |
| X FAB Silicon |
Quaker Chemical and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quaker Chemical and X FAB
The main advantage of trading using opposite Quaker Chemical and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Quaker Chemical vs. Global Ship Lease | Quaker Chemical vs. Q2M Managementberatung AG | Quaker Chemical vs. Platinum Investment Management | Quaker Chemical vs. AEON METALS LTD |
| X FAB vs. DFS Furniture PLC | X FAB vs. American Homes 4 | X FAB vs. ADDUS HOMECARE | X FAB vs. United Airlines Holdings |
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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