Correlation Between Quaker Chemical and Bilibili

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

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

Diversification Opportunities for Quaker Chemical and Bilibili

0.04

Correlation Coefficient

Quaker Chemical  Bilibili

Significant diversification

The 3 months correlation between Quaker and Bilibili is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Bilibili go up and down completely randomly.

Pair Corralation between Quaker Chemical and Bilibili

Assuming the 90 days horizon Quaker Chemical is expected to generate 92.0 times less return on investment than Bilibili. But when comparing it to its historical volatility, Quaker Chemical is 2.35 times less risky than Bilibili. It trades about 0.0 of its potential returns per unit of risk. Bilibili is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,315  in Bilibili on October 6, 2024 and sell it today you would earn a total of  345.00  from holding Bilibili or generate 26.24% return on investment over 90 days.

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

Quaker Chemical  vs.  Bilibili

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Bilibili

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Quaker Chemical and Bilibili

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

The idea behind Quaker Chemical and Bilibili 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.