Correlation Between Siamgas and Quaker Chemical

Can any of the company-specific risk be diversified away by investing in both Siamgas 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 Siamgas and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siamgas And Petrochemicals and Quaker Chemical, you can compare the effects of market volatilities on Siamgas 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 Siamgas with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and Quaker Chemical.

Diversification Opportunities for Siamgas and Quaker Chemical

0.08

Correlation Coefficient

Siamgas  Quaker Chemical

Significant diversification

The 3 months correlation between Siamgas and Quaker is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Siamgas 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 Siamgas And Petrochemicals 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 Siamgas i.e., Siamgas and Quaker Chemical go up and down completely randomly.

Pair Corralation between Siamgas and Quaker Chemical

Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 1.8 times more return on investment than Quaker Chemical. However, Siamgas is 1.8 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 0.0 per unit of risk. If you would invest  16.00  in Siamgas And Petrochemicals on August 31, 2024 and sell it today you would earn a total of  1.00  from holding Siamgas And Petrochemicals or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Siamgas And Petrochemicals  vs.  Quaker Chemical

Siamgas And Petroche

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Siamgas may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Quaker Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quaker Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Quaker Chemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Siamgas and Quaker Chemical

The main advantage of trading using opposite Siamgas and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas 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.

The idea behind Siamgas And Petrochemicals and Quaker Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.