Correlation Between Chemours and Maison Solutions

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

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

Diversification Opportunities for Chemours and Maison Solutions

-0.26

Correlation Coefficient

Chemours  Maison Solutions

Very good diversification

The 3 months correlation between Chemours and Maison is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Maison Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maison Solutions 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 Maison Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maison Solutions has no effect on the direction of Chemours i.e., Chemours and Maison Solutions go up and down completely randomly.

Pair Corralation between Chemours and Maison Solutions

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Maison Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Chemours Co is 3.48 times less risky than Maison Solutions. The stock trades about -0.01 of its potential returns per unit of risk. The Maison Solutions is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  896.00  in Maison Solutions on October 5, 2024 and sell it today you would lose (767.00) from holding Maison Solutions or give up 85.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	69.01%
Values	Daily Returns

Chemours Co  vs.  Maison Solutions

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 fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Maison Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maison Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Maison Solutions 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 Maison Solutions

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

The idea behind Chemours Co and Maison Solutions 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.