Correlation Between Nucletron Electronic and Quaker Chemical

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

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

Diversification Opportunities for Nucletron Electronic and Quaker Chemical

0.0

Correlation Coefficient

Nucletron Electronic  Quaker Chemical

Pay attention - limited upside

The 3 months correlation between Nucletron and Quaker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nucletron Electronic Aktienges and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Nucletron Electronic 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 Nucletron Electronic Aktiengesellschaft 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 Nucletron Electronic i.e., Nucletron Electronic and Quaker Chemical go up and down completely randomly.

Pair Corralation between Nucletron Electronic and Quaker Chemical

Assuming the 90 days horizon Nucletron Electronic Aktiengesellschaft is expected to generate 0.14 times more return on investment than Quaker Chemical. However, Nucletron Electronic Aktiengesellschaft is 7.14 times less risky than Quaker Chemical. It trades about 0.06 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.01 per unit of risk. If you would invest  695.00  in Nucletron Electronic Aktiengesellschaft on October 4, 2024 and sell it today you would earn a total of  65.00  from holding Nucletron Electronic Aktiengesellschaft or generate 9.35% return on investment over 90 days.

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

Nucletron Electronic Aktienges  vs.  Quaker Chemical

Nucletron Electronic

Risk-Adjusted Performance

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Very Weak

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

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 Nucletron Electronic and Quaker Chemical

The main advantage of trading using opposite Nucletron Electronic and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucletron Electronic 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 Nucletron Electronic Aktiengesellschaft 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.