Correlation Between Chemours and AngloGold Ashanti

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

By analyzing existing cross correlation between Chemours Co and AngloGold Ashanti plc, you can compare the effects of market volatilities on Chemours and AngloGold Ashanti 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 AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and AngloGold Ashanti.

Diversification Opportunities for Chemours and AngloGold Ashanti

-0.41

Correlation Coefficient

Chemours  AngloGold Ashanti

Very good diversification

The 3 months correlation between Chemours and AngloGold is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Chemours i.e., Chemours and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Chemours and AngloGold Ashanti

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.36 times more return on investment than AngloGold Ashanti. However, Chemours is 1.36 times more volatile than AngloGold Ashanti plc. It trades about 0.08 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about -0.1 per unit of risk. If you would invest  1,919  in Chemours Co on August 30, 2024 and sell it today you would earn a total of  263.00  from holding Chemours Co or generate 13.71% return on investment over 90 days.

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

Chemours Co  vs.  AngloGold Ashanti plc

Chemours

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 5 (%) 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.

AngloGold Ashanti plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AngloGold Ashanti plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Chemours and AngloGold Ashanti

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

The idea behind Chemours Co and AngloGold Ashanti plc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.