Correlation Between Chemours and International Media

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

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

Diversification Opportunities for Chemours and International Media

-0.49

Correlation Coefficient

Chemours  International Media

Very good diversification

The 3 months correlation between Chemours and International is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Chemours i.e., Chemours and International Media go up and down completely randomly.

Pair Corralation between Chemours and International Media

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the International Media. In addition to that, Chemours is 2.11 times more volatile than International Media Acquisition. It trades about -0.04 of its total potential returns per unit of risk. International Media Acquisition is currently generating about 0.07 per unit of volatility. If you would invest  1,015  in International Media Acquisition on September 25, 2024 and sell it today you would earn a total of  185.00  from holding International Media Acquisition or generate 18.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	62.5%
Values	Daily Returns

Chemours Co  vs.  International Media Acquisitio

Chemours

Risk-Adjusted Performance

0 of 100

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 rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

International Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Media Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, International Media is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chemours and International Media

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

The idea behind Chemours Co and International Media Acquisition 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.