Correlation Between Telecom Argentina and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina 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 Telecom Argentina and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina SA and Quaker Chemical, you can compare the effects of market volatilities on Telecom Argentina 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 Telecom Argentina with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Quaker Chemical.
Diversification Opportunities for Telecom Argentina and Quaker Chemical
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telecom and Quaker is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Telecom Argentina 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 Telecom Argentina SA 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 Telecom Argentina i.e., Telecom Argentina and Quaker Chemical go up and down completely randomly.
Pair Corralation between Telecom Argentina and Quaker Chemical
Assuming the 90 days horizon Telecom Argentina SA is expected to under-perform the Quaker Chemical. In addition to that, Telecom Argentina is 1.92 times more volatile than Quaker Chemical. It trades about -0.14 of its total potential returns per unit of risk. Quaker Chemical is currently generating about 0.05 per unit of volatility. If you would invest 12,951 in Quaker Chemical on November 8, 2024 and sell it today you would earn a total of 249.00 from holding Quaker Chemical or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina SA vs. Quaker Chemical
Performance |
| Timeline |
| Telecom Argentina |
| Quaker Chemical |
Telecom Argentina and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Quaker Chemical
The main advantage of trading using opposite Telecom Argentina and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina 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.| Telecom Argentina vs. EVS Broadcast Equipment | Telecom Argentina vs. TITANIUM TRANSPORTGROUP | Telecom Argentina vs. BROADPEAK SA EO | Telecom Argentina vs. GOLD ROAD RES |
| Quaker Chemical vs. X FAB Silicon Foundries | Quaker Chemical vs. CARDINAL HEALTH | Quaker Chemical vs. OPKO HEALTH | Quaker Chemical vs. Molina Healthcare |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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