Correlation Between Chemours and 466313AH6

Can any of the company-specific risk be diversified away by investing in both Chemours and 466313AH6 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 Chemours and 466313AH6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemours Co and US466313AH63, you can compare the effects of market volatilities on Chemours and 466313AH6 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 Chemours with a short position of 466313AH6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and 466313AH6.

Diversification Opportunities for Chemours and 466313AH6

-0.44

Correlation Coefficient

Chemours  466313AH6

Very good diversification

The 3 months correlation between Chemours and 466313AH6 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and US466313AH63 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US466313AH63 and Chemours 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 Chemours Co are associated (or correlated) with 466313AH6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US466313AH63 has no effect on the direction of Chemours i.e., Chemours and 466313AH6 go up and down completely randomly.

Pair Corralation between Chemours and 466313AH6

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the 466313AH6. In addition to that, Chemours is 4.76 times more volatile than US466313AH63. It trades about -0.1 of its total potential returns per unit of risk. US466313AH63 is currently generating about -0.01 per unit of volatility. If you would invest  9,544  in US466313AH63 on June 21, 2024 and sell it today you would lose (35.00) from holding US466313AH63 or give up 0.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	83.87%
Values	Daily Returns

Chemours Co  vs.  US466313AH63

Chemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

US466313AH63

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US466313AH63 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 466313AH6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and 466313AH6

The main advantage of trading using opposite Chemours and 466313AH6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, 466313AH6 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 466313AH6 will offset losses from the drop in 466313AH6's long position.

The idea behind Chemours Co and US466313AH63 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.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.