Correlation Between Quaker Chemical and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and MACOM Technology 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 MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and MACOM Technology Solutions, you can compare the effects of market volatilities on Quaker Chemical and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and MACOM Technology.
Diversification Opportunities for Quaker Chemical and MACOM Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quaker and MACOM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and MACOM Technology go up and down completely randomly.
Pair Corralation between Quaker Chemical and MACOM Technology
Assuming the 90 days horizon Quaker Chemical is expected to generate 1.85 times less return on investment than MACOM Technology. In addition to that, Quaker Chemical is 1.21 times more volatile than MACOM Technology Solutions. It trades about 0.12 of its total potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.27 per unit of volatility. If you would invest 8,400 in MACOM Technology Solutions on April 22, 2025 and sell it today you would earn a total of 3,800 from holding MACOM Technology Solutions or generate 45.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Quaker Chemical vs. MACOM Technology Solutions
Performance |
Timeline |
Quaker Chemical |
MACOM Technology Sol |
Quaker Chemical and MACOM Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quaker Chemical and MACOM Technology
The main advantage of trading using opposite Quaker Chemical and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.Quaker Chemical vs. Shenandoah Telecommunications | Quaker Chemical vs. LG Display Co | Quaker Chemical vs. Iridium Communications | Quaker Chemical vs. ANDRADA MINING LTD |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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