Correlation Between Chemours and Electrovaya Common

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

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

Diversification Opportunities for Chemours and Electrovaya Common

0.4

Correlation Coefficient

Chemours  Electrovaya Common

Very weak diversification

The 3 months correlation between Chemours and Electrovaya is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Chemours i.e., Chemours and Electrovaya Common go up and down completely randomly.

Pair Corralation between Chemours and Electrovaya Common

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Electrovaya Common. But the stock apears to be less risky and, when comparing its historical volatility, Chemours Co is 1.24 times less risky than Electrovaya Common. The stock trades about -0.07 of its potential returns per unit of risk. The Electrovaya Common Shares is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  217.00  in Electrovaya Common Shares on December 21, 2024 and sell it today you would earn a total of  68.00  from holding Electrovaya Common Shares or generate 31.34% return on investment over 90 days.

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

Chemours Co  vs.  Electrovaya Common Shares

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.

Electrovaya Common Shares

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Electrovaya Common Shares are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Electrovaya Common sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chemours and Electrovaya Common

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

The idea behind Chemours Co and Electrovaya Common Shares 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.