Correlation Between Chemours and Kandi Technologies

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

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

Diversification Opportunities for Chemours and Kandi Technologies

-0.13

Correlation Coefficient

Chemours  Kandi Technologies

Good diversification

The 3 months correlation between Chemours and Kandi is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Chemours i.e., Chemours and Kandi Technologies go up and down completely randomly.

Pair Corralation between Chemours and Kandi Technologies

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.11 times more return on investment than Kandi Technologies. However, Chemours is 1.11 times more volatile than Kandi Technologies Group. It trades about -0.01 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.05 per unit of risk. If you would invest  2,833  in Chemours Co on September 21, 2024 and sell it today you would lose (1,086) from holding Chemours Co or give up 38.33% of portfolio value over 90 days.

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

Chemours Co  vs.  Kandi Technologies Group

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.

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Chemours and Kandi Technologies

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

The idea behind Chemours Co and Kandi Technologies Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.