Correlation Between Quaker Chemical and Symrise Ag

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

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

Diversification Opportunities for Quaker Chemical and Symrise Ag

0.45

Correlation Coefficient

Quaker Chemical  Symrise Ag

Very weak diversification

The 3 months correlation between Quaker and Symrise is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Symrise Ag PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symrise Ag PK and Quaker Chemical 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 Quaker Chemical are associated (or correlated) with Symrise Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symrise Ag PK has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Symrise Ag go up and down completely randomly.

Pair Corralation between Quaker Chemical and Symrise Ag

Considering the 90-day investment horizon Quaker Chemical is expected to under-perform the Symrise Ag. In addition to that, Quaker Chemical is 1.27 times more volatile than Symrise Ag PK. It trades about -0.05 of its total potential returns per unit of risk. Symrise Ag PK is currently generating about -0.02 per unit of volatility. If you would invest  2,646  in Symrise Ag PK on December 29, 2024 and sell it today you would lose (75.00) from holding Symrise Ag PK or give up 2.83% of portfolio value over 90 days.

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

Quaker Chemical  vs.  Symrise Ag PK

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. Even with relatively invariable basic indicators, Quaker Chemical is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Symrise Ag PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Symrise Ag PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Symrise Ag is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quaker Chemical and Symrise Ag

The main advantage of trading using opposite Quaker Chemical and Symrise Ag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Symrise Ag 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 Symrise Ag will offset losses from the drop in Symrise Ag's long position.

The idea behind Quaker Chemical and Symrise Ag PK 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.