Correlation Between SCOTT TECHNOLOGY and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and Quaker Chemical 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 SCOTT TECHNOLOGY and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Quaker Chemical, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and Quaker Chemical 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 SCOTT TECHNOLOGY with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Quaker Chemical.
Diversification Opportunities for SCOTT TECHNOLOGY and Quaker Chemical
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCOTT and Quaker is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Quaker Chemical go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Quaker Chemical
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 1.45 times more return on investment than Quaker Chemical. However, SCOTT TECHNOLOGY is 1.45 times more volatile than Quaker Chemical. It trades about 0.01 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.02 per unit of risk. If you would invest 118.00 in SCOTT TECHNOLOGY on November 7, 2024 and sell it today you would lose (2.00) from holding SCOTT TECHNOLOGY or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Quaker Chemical
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Quaker Chemical |
SCOTT TECHNOLOGY and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Quaker Chemical
The main advantage of trading using opposite SCOTT TECHNOLOGY and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| SCOTT TECHNOLOGY vs. Keck Seng Investments | SCOTT TECHNOLOGY vs. Darden Restaurants | SCOTT TECHNOLOGY vs. VARIOUS EATERIES LS | SCOTT TECHNOLOGY vs. CHRYSALIS INVESTMENTS LTD |
| Quaker Chemical vs. Fevertree Drinks PLC | Quaker Chemical vs. Mitsui Chemicals | Quaker Chemical vs. NH Foods | Quaker Chemical vs. EITZEN CHEMICALS |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |