Correlation Between Lion One and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Quaker Chemical, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Quaker Chemical.
Diversification Opportunities for Lion One and Quaker Chemical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Quaker is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Quaker Chemical go up and down completely randomly.
Pair Corralation between Lion One and Quaker Chemical
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Quaker Chemical. In addition to that, Lion One is 2.01 times more volatile than Quaker Chemical. It trades about -0.05 of its total potential returns per unit of risk. Quaker Chemical is currently generating about 0.0 per unit of volatility. If you would invest 14,751 in Quaker Chemical on September 14, 2024 and sell it today you would lose (151.00) from holding Quaker Chemical or give up 1.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lion One Metals vs. Quaker Chemical
Performance |
Timeline |
Lion One Metals |
Quaker Chemical |
Lion One and Quaker Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lion One and Quaker Chemical
The main advantage of trading using opposite Lion One and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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