Correlation Between JD HEALTH and Quaker Chemical

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

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

Diversification Opportunities for JD HEALTH and Quaker Chemical

-0.14

Correlation Coefficient

JD HEALTH  Quaker Chemical

Good diversification

The 3 months correlation between 8ZN and Quaker is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and JD HEALTH 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 JD HEALTH INTL 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 JD HEALTH i.e., JD HEALTH and Quaker Chemical go up and down completely randomly.

Pair Corralation between JD HEALTH and Quaker Chemical

Assuming the 90 days horizon JD HEALTH INTL is expected to generate 1.84 times more return on investment than Quaker Chemical. However, JD HEALTH is 1.84 times more volatile than Quaker Chemical. It trades about 0.08 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.12 per unit of risk. If you would invest  348.00  in JD HEALTH INTL on December 20, 2024 and sell it today you would earn a total of  52.00  from holding JD HEALTH INTL or generate 14.94% return on investment over 90 days.

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

JD HEALTH INTL  vs.  Quaker Chemical

JD HEALTH INTL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JD HEALTH INTL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JD HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Quaker Chemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quaker Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with JD HEALTH and Quaker Chemical

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

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..