Correlation Between Quaker Chemical and COMPUTERSHARE

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

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

Diversification Opportunities for Quaker Chemical and COMPUTERSHARE

0.1

Correlation Coefficient

Quaker Chemical  COMPUTERSHARE

Average diversification

The 3 months correlation between Quaker and COMPUTERSHARE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and COMPUTERSHARE go up and down completely randomly.

Pair Corralation between Quaker Chemical and COMPUTERSHARE

Assuming the 90 days horizon Quaker Chemical is expected to generate 1.69 times more return on investment than COMPUTERSHARE. However, Quaker Chemical is 1.69 times more volatile than COMPUTERSHARE. It trades about 0.09 of its potential returns per unit of risk. COMPUTERSHARE is currently generating about 0.05 per unit of risk. If you would invest  8,963  in Quaker Chemical on April 24, 2025 and sell it today you would earn a total of  1,237  from holding Quaker Chemical or generate 13.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Quaker Chemical  vs.  COMPUTERSHARE

Quaker Chemical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quaker Chemical are ranked lower than 7 (%) 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.

COMPUTERSHARE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, COMPUTERSHARE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Quaker Chemical and COMPUTERSHARE

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

The idea behind Quaker Chemical and COMPUTERSHARE 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.