Correlation Between Chemours and 538034AN9

Can any of the company-specific risk be diversified away by investing in both Chemours and 538034AN9 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 538034AN9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemours Co and Live Nation Entertainment, you can compare the effects of market volatilities on Chemours and 538034AN9 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 538034AN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and 538034AN9.

Diversification Opportunities for Chemours and 538034AN9

-0.3

Correlation Coefficient

Chemours  538034AN9

Very good diversification

The 3 months correlation between Chemours and 538034AN9 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 538034AN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of Chemours i.e., Chemours and 538034AN9 go up and down completely randomly.

Pair Corralation between Chemours and 538034AN9

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 5.03 times more return on investment than 538034AN9. However, Chemours is 5.03 times more volatile than Live Nation Entertainment. It trades about 0.13 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.27 per unit of risk. If you would invest  2,031  in Chemours Co on September 5, 2024 and sell it today you would earn a total of  132.00  from holding Chemours Co or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

Chemours Co  vs.  Live Nation Entertainment

Chemours

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.

Live Nation Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 538034AN9 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and 538034AN9

The main advantage of trading using opposite Chemours and 538034AN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, 538034AN9 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 538034AN9 will offset losses from the drop in 538034AN9's long position.

The idea behind Chemours Co and Live Nation Entertainment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.