Correlation Between Chemours and NESNVX

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

By analyzing existing cross correlation between Chemours Co and NESNVX 125 15 SEP 30, you can compare the effects of market volatilities on Chemours and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and NESNVX.

Diversification Opportunities for Chemours and NESNVX

0.2

Correlation Coefficient

Chemours  NESNVX

Modest diversification

The 3 months correlation between Chemours and NESNVX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and NESNVX 125 15 SEP 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 125 15 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 125 15 has no effect on the direction of Chemours i.e., Chemours and NESNVX go up and down completely randomly.

Pair Corralation between Chemours and NESNVX

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 4.32 times more return on investment than NESNVX. However, Chemours is 4.32 times more volatile than NESNVX 125 15 SEP 30. It trades about -0.07 of its potential returns per unit of risk. NESNVX 125 15 SEP 30 is currently generating about -0.36 per unit of risk. If you would invest  2,006  in Chemours Co on September 30, 2024 and sell it today you would lose (305.00) from holding Chemours Co or give up 15.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.94%
Values	Daily Returns

Chemours Co  vs.  NESNVX 125 15 SEP 30

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

NESNVX 125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 125 15 SEP 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 125 15 SEP 30 investors.

Pair Trading with Chemours and NESNVX

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

The idea behind Chemours Co and NESNVX 125 15 SEP 30 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.