Correlation Between Arq and Chemours

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

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

Diversification Opportunities for Arq and Chemours

0.72

Correlation Coefficient

Arq  Chemours

Poor diversification

The 3 months correlation between Arq and Chemours is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Arq Inc and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Arq 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 Arq Inc are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Arq i.e., Arq and Chemours go up and down completely randomly.

Pair Corralation between Arq and Chemours

Considering the 90-day investment horizon Arq Inc is expected to under-perform the Chemours. In addition to that, Arq is 1.04 times more volatile than Chemours Co. It trades about -0.16 of its total potential returns per unit of risk. Chemours Co is currently generating about -0.07 per unit of volatility. If you would invest  1,718  in Chemours Co on December 19, 2024 and sell it today you would lose (255.00) from holding Chemours Co or give up 14.84% of portfolio value over 90 days.

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

Arq Inc  vs.  Chemours Co

Arq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Chemours

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Arq and Chemours

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

The idea behind Arq Inc and Chemours Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.