Correlation Between Chemours and SPDR Series

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

By analyzing existing cross correlation between The Chemours and SPDR Series Trust, you can compare the effects of market volatilities on Chemours and SPDR Series 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 SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and SPDR Series.

Diversification Opportunities for Chemours and SPDR Series

-0.05

Correlation Coefficient

Chemours  SPDR Series

Good diversification

The 3 months correlation between Chemours and SPDR is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Chemours and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust 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 The Chemours are associated (or correlated) with SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of Chemours i.e., Chemours and SPDR Series go up and down completely randomly.

Pair Corralation between Chemours and SPDR Series

Assuming the 90 days horizon The Chemours is expected to under-perform the SPDR Series. In addition to that, Chemours is 1.01 times more volatile than SPDR Series Trust. It trades about -0.01 of its total potential returns per unit of risk. SPDR Series Trust is currently generating about 0.04 per unit of volatility. If you would invest  258,193  in SPDR Series Trust on October 12, 2024 and sell it today you would earn a total of  21,807  from holding SPDR Series Trust or generate 8.45% return on investment over 90 days.

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

The Chemours  vs.  SPDR Series Trust

Chemours

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Chemours are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SPDR Series Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Series Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SPDR Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and SPDR Series

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

The idea behind The Chemours and SPDR Series Trust 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.