Correlation Between Chemours and 654106AH6

Can any of the company-specific risk be diversified away by investing in both Chemours and 654106AH6 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 654106AH6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemours Co and NIKE INC, you can compare the effects of market volatilities on Chemours and 654106AH6 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 654106AH6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and 654106AH6.

Diversification Opportunities for Chemours and 654106AH6

-0.1

Correlation Coefficient

Chemours  654106AH6

Good diversification

The 3 months correlation between Chemours and 654106AH6 is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and NIKE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 654106AH6 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 654106AH6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 654106AH6 has no effect on the direction of Chemours i.e., Chemours and 654106AH6 go up and down completely randomly.

Pair Corralation between Chemours and 654106AH6

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the 654106AH6. In addition to that, Chemours is 14.6 times more volatile than NIKE INC. It trades about -0.01 of its total potential returns per unit of risk. NIKE INC is currently generating about 0.0 per unit of volatility. If you would invest  9,575  in NIKE INC on September 20, 2024 and sell it today you would earn a total of  31.00  from holding NIKE INC or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

Chemours Co  vs.  NIKE INC

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 rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

654106AH6

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NIKE INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 654106AH6 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and 654106AH6

The main advantage of trading using opposite Chemours and 654106AH6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, 654106AH6 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 654106AH6 will offset losses from the drop in 654106AH6's long position.

The idea behind Chemours Co and NIKE INC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.