Correlation Between Quaker Chemical and Oracle
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Oracle 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 Oracle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Oracle, you can compare the effects of market volatilities on Quaker Chemical and Oracle 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 Oracle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Oracle.
Diversification Opportunities for Quaker Chemical and Oracle
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quaker and Oracle is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle 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 Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Oracle go up and down completely randomly.
Pair Corralation between Quaker Chemical and Oracle
Assuming the 90 days horizon Quaker Chemical is expected to generate 0.85 times more return on investment than Oracle. However, Quaker Chemical is 1.18 times less risky than Oracle. It trades about -0.58 of its potential returns per unit of risk. Oracle is currently generating about -0.54 per unit of risk. If you would invest 14,800 in Quaker Chemical on October 10, 2024 and sell it today you would lose (1,700) from holding Quaker Chemical or give up 11.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Quaker Chemical vs. Oracle
Performance |
Timeline |
Quaker Chemical |
Oracle |
Quaker Chemical and Oracle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quaker Chemical and Oracle
The main advantage of trading using opposite Quaker Chemical and Oracle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Oracle 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 Oracle will offset losses from the drop in Oracle's long position.Quaker Chemical vs. INFORMATION SVC GRP | Quaker Chemical vs. Check Point Software | Quaker Chemical vs. Teradata Corp | Quaker Chemical vs. DATATEC LTD 2 |
Oracle vs. Sims Metal Management | Oracle vs. Waste Management | Oracle vs. Platinum Investment Management | Oracle vs. CeoTronics AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |