Correlation Between ScanSource and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both ScanSource 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 ScanSource and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Quaker Chemical, you can compare the effects of market volatilities on ScanSource 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 ScanSource with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Quaker Chemical.
Diversification Opportunities for ScanSource and Quaker Chemical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ScanSource and Quaker is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and ScanSource 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 ScanSource 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 ScanSource i.e., ScanSource and Quaker Chemical go up and down completely randomly.
Pair Corralation between ScanSource and Quaker Chemical
Assuming the 90 days horizon ScanSource is expected to generate 1.12 times more return on investment than Quaker Chemical. However, ScanSource is 1.12 times more volatile than Quaker Chemical. It trades about 0.04 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.03 per unit of risk. If you would invest 4,360 in ScanSource on September 1, 2024 and sell it today you would earn a total of 360.00 from holding ScanSource or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ScanSource vs. Quaker Chemical
Performance |
| Timeline |
| ScanSource |
| Quaker Chemical |
ScanSource and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Quaker Chemical
The main advantage of trading using opposite ScanSource and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource 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.| ScanSource vs. EAGLE MATERIALS | ScanSource vs. Martin Marietta Materials | ScanSource vs. Magnachip Semiconductor | ScanSource vs. Mitsubishi Materials |
| Quaker Chemical vs. Transport International Holdings | Quaker Chemical vs. TSOGO SUN GAMING | Quaker Chemical vs. Air Transport Services | Quaker Chemical vs. EVS Broadcast Equipment |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |