Correlation Between Quaker Chemical and PHENIXFIN CORP

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

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

Diversification Opportunities for Quaker Chemical and PHENIXFIN CORP

-0.42

Correlation Coefficient

Quaker Chemical  PHENIXFIN CORP

Very good diversification

The 3 months correlation between Quaker and PHENIXFIN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and PHENIXFIN P DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHENIXFIN P DL 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 PHENIXFIN CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHENIXFIN P DL has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and PHENIXFIN CORP go up and down completely randomly.

Pair Corralation between Quaker Chemical and PHENIXFIN CORP

Assuming the 90 days horizon Quaker Chemical is expected to under-perform the PHENIXFIN CORP. In addition to that, Quaker Chemical is 1.25 times more volatile than PHENIXFIN P DL. It trades about -0.09 of its total potential returns per unit of risk. PHENIXFIN P DL is currently generating about 0.1 per unit of volatility. If you would invest  4,542  in PHENIXFIN P DL on December 22, 2024 and sell it today you would earn a total of  418.00  from holding PHENIXFIN P DL or generate 9.2% return on investment over 90 days.

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

Quaker Chemical  vs.  PHENIXFIN P DL

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 latest unsteady 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.

PHENIXFIN P DL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN CORP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Quaker Chemical and PHENIXFIN CORP

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

The idea behind Quaker Chemical and PHENIXFIN P DL 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.