Correlation Between Chemours and Interactive Strength

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

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

Diversification Opportunities for Chemours and Interactive Strength

0.47

Correlation Coefficient

Chemours  Interactive Strength

Very weak diversification

The 3 months correlation between Chemours and Interactive is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of Chemours i.e., Chemours and Interactive Strength go up and down completely randomly.

Pair Corralation between Chemours and Interactive Strength

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Interactive Strength. But the stock apears to be less risky and, when comparing its historical volatility, Chemours Co is 6.22 times less risky than Interactive Strength. The stock trades about -0.39 of its potential returns per unit of risk. The Interactive Strength Common is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  207.00  in Interactive Strength Common on December 4, 2024 and sell it today you would earn a total of  24.00  from holding Interactive Strength Common or generate 11.59% 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.  Interactive Strength Common

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.

Interactive Strength

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interactive Strength Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively fragile basic indicators, Interactive Strength may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chemours and Interactive Strength

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

The idea behind Chemours Co and Interactive Strength Common 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.