Correlation Between Quaker Chemical and Linde Plc
Can any of the company-specific risk be diversified away by investing in both Quaker Chemical and Linde Plc 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 Linde Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quaker Chemical and Linde plc Ordinary, you can compare the effects of market volatilities on Quaker Chemical and Linde Plc 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 Linde Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and Linde Plc.
Diversification Opportunities for Quaker Chemical and Linde Plc
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Quaker and Linde is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and Linde plc Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc Ordinary 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 Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc Ordinary has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and Linde Plc go up and down completely randomly.
Pair Corralation between Quaker Chemical and Linde Plc
Considering the 90-day investment horizon Quaker Chemical is expected to generate 3.44 times more return on investment than Linde Plc. However, Quaker Chemical is 3.44 times more volatile than Linde plc Ordinary. It trades about 0.22 of its potential returns per unit of risk. Linde plc Ordinary is currently generating about 0.09 per unit of risk. If you would invest 10,367 in Quaker Chemical on May 31, 2025 and sell it today you would earn a total of 4,169 from holding Quaker Chemical or generate 40.21% 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. Linde plc Ordinary
Performance |
Timeline |
Quaker Chemical |
Linde plc Ordinary |
Quaker Chemical and Linde Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quaker Chemical and Linde Plc
The main advantage of trading using opposite Quaker Chemical and Linde Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quaker Chemical position performs unexpectedly, Linde Plc 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 Linde Plc will offset losses from the drop in Linde Plc's long position.Quaker Chemical vs. Air Products and | Quaker Chemical vs. Linde plc Ordinary | Quaker Chemical vs. LyondellBasell Industries NV | Quaker Chemical vs. Eastman Chemical |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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