Correlation Between Quaker Chemical and NXP Semiconductors
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and NXP Semiconductors 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 NXP Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and NXP Semiconductors NV, you can compare the effects of market volatilities on Quaker Chemical and NXP Semiconductors 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 NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and NXP Semiconductors.
Diversification Opportunities for Quaker Chemical and NXP Semiconductors
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Quaker and NXP is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors 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 NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and NXP Semiconductors go up and down completely randomly.
Pair Corralation between Quaker Chemical and NXP Semiconductors
Assuming the 90 days horizon Quaker Chemical is expected to generate 1.55 times less return on investment than NXP Semiconductors. In addition to that, Quaker Chemical is 1.13 times more volatile than NXP Semiconductors NV. It trades about 0.09 of its total potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.16 per unit of volatility. If you would invest 15,527 in NXP Semiconductors NV on April 23, 2025 and sell it today you would earn a total of 3,823 from holding NXP Semiconductors NV or generate 24.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Quaker Chemical vs. NXP Semiconductors NV
Performance |
Timeline |
Quaker Chemical |
NXP Semiconductors |
Quaker Chemical and NXP Semiconductors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quaker Chemical and NXP Semiconductors
The main advantage of trading using opposite Quaker Chemical and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' long position.Quaker Chemical vs. SmarTone Telecommunications Holdings | Quaker Chemical vs. COMPUTERSHARE | Quaker Chemical vs. UNITED INTERNET N | Quaker Chemical vs. Urban Outfitters |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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