Correlation Between Chemours and Linde Plc
Can any of the company-specific risk be diversified away by investing in both Chemours and Linde Plc 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 Linde Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Linde plc Ordinary, you can compare the effects of market volatilities on Chemours and Linde Plc 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 Linde Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Linde Plc.
Diversification Opportunities for Chemours and Linde Plc
Very good diversification
The 3 months correlation between Chemours and Linde is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Linde plc Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc Ordinary 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 Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc Ordinary has no effect on the direction of Chemours i.e., Chemours and Linde Plc go up and down completely randomly.
Pair Corralation between Chemours and Linde Plc
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Linde Plc. In addition to that, Chemours is 3.2 times more volatile than Linde plc Ordinary. It trades about -0.08 of its total potential returns per unit of risk. Linde plc Ordinary is currently generating about 0.16 per unit of volatility. If you would invest 42,157 in Linde plc Ordinary on December 27, 2024 and sell it today you would earn a total of 3,986 from holding Linde plc Ordinary or generate 9.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Chemours Co vs. Linde plc Ordinary
Performance |
Timeline |
Chemours |
Linde plc Ordinary |
Chemours and Linde Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chemours and Linde Plc
The main advantage of trading using opposite Chemours and Linde Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Linde Plc 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 Linde Plc will offset losses from the drop in Linde Plc's long position.Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
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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 Stocks Directory module to find actively traded stocks across global markets.
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