Correlation Between Venator Materials and Quaker Chemical

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

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

Diversification Opportunities for Venator Materials and Quaker Chemical

0.0

Correlation Coefficient

Venator Materials  Quaker Chemical

Pay attention - limited upside

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

Pair Corralation between Venator Materials and Quaker Chemical

If you would invest (100.00) in Venator Materials PLC on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Venator Materials PLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Venator Materials PLC  vs.  Quaker Chemical

Venator Materials PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Venator Materials PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Venator Materials is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Venator Materials and Quaker Chemical

The main advantage of trading using opposite Venator Materials and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Venator Materials 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 Venator Materials PLC 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.