Correlation Between Quaker Chemical and CITIC

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

By analyzing existing cross correlation between Quaker Chemical and CITIC LTD ADR5, you can compare the effects of market volatilities on Quaker Chemical and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quaker Chemical and CITIC.

Diversification Opportunities for Quaker Chemical and CITIC

0.51

Correlation Coefficient

Quaker Chemical  CITIC

Very weak diversification

The 3 months correlation between Quaker and CITIC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Quaker Chemical and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of Quaker Chemical i.e., Quaker Chemical and CITIC go up and down completely randomly.

Pair Corralation between Quaker Chemical and CITIC

Assuming the 90 days horizon Quaker Chemical is expected to generate 2.11 times less return on investment than CITIC. In addition to that, Quaker Chemical is 1.83 times more volatile than CITIC LTD ADR5. It trades about 0.08 of its total potential returns per unit of risk. CITIC LTD ADR5 is currently generating about 0.3 per unit of volatility. If you would invest  496.00  in CITIC LTD ADR5 on April 30, 2025 and sell it today you would earn a total of  154.00  from holding CITIC LTD ADR5 or generate 31.05% return on investment over 90 days.

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

Quaker Chemical  vs.  CITIC LTD ADR5

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 uncertain basic indicators, Quaker Chemical reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC LTD ADR5

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC LTD ADR5 are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quaker Chemical and CITIC

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

The idea behind Quaker Chemical and CITIC LTD ADR5 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.