Correlation Between HEALTHCARE TRPFD and Quaker Chemical

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

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

Diversification Opportunities for HEALTHCARE TRPFD and Quaker Chemical

0.62

Correlation Coefficient

HEALTHCARE TRPFD  Quaker Chemical

Poor diversification

The 3 months correlation between HEALTHCARE and Quaker is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE TRPFD SH and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD SH 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 HEALTHCARE TRPFD i.e., HEALTHCARE TRPFD and Quaker Chemical go up and down completely randomly.

Pair Corralation between HEALTHCARE TRPFD and Quaker Chemical

Assuming the 90 days horizon HEALTHCARE TRPFD SH is expected to generate 0.81 times more return on investment than Quaker Chemical. However, HEALTHCARE TRPFD SH is 1.23 times less risky than Quaker Chemical. It trades about 0.13 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.08 per unit of risk. If you would invest  1,143  in HEALTHCARE TRPFD SH on April 23, 2025 and sell it today you would earn a total of  197.00  from holding HEALTHCARE TRPFD SH or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

HEALTHCARE TRPFD SH  vs.  Quaker Chemical

HEALTHCARE TRPFD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEALTHCARE TRPFD SH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEALTHCARE TRPFD reported solid returns over the last few months and may actually be approaching a breakup point.

Quaker Chemical

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quaker Chemical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Quaker Chemical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEALTHCARE TRPFD and Quaker Chemical

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

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.