Correlation Between BCE and Chemours

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

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

Diversification Opportunities for BCE and Chemours

0.52

Correlation Coefficient

BCE  Chemours

Very weak diversification

The 3 months correlation between BCE and Chemours is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and BCE 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 BCE 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 BCE i.e., BCE and Chemours go up and down completely randomly.

Pair Corralation between BCE and Chemours

If you would invest  2,031  in Chemours Co on September 4, 2024 and sell it today you would earn a total of  134.00  from holding Chemours Co or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

BCE Inc  vs.  Chemours Co

BCE Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BCE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Chemours

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BCE and Chemours

The main advantage of trading using opposite BCE and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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 BCE 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.