Correlation Between Chemours and RENIASSANCERE

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

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

Diversification Opportunities for Chemours and RENIASSANCERE

-0.17

Correlation Coefficient

Chemours  RENIASSANCERE

Good diversification

The 3 months correlation between Chemours and RENIASSANCERE is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and RENIASSANCERE FIN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENIASSANCERE FIN INC 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 RENIASSANCERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENIASSANCERE FIN INC has no effect on the direction of Chemours i.e., Chemours and RENIASSANCERE go up and down completely randomly.

Pair Corralation between Chemours and RENIASSANCERE

Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the RENIASSANCERE. In addition to that, Chemours is 4.82 times more volatile than RENIASSANCERE FIN INC. It trades about -0.08 of its total potential returns per unit of risk. RENIASSANCERE FIN INC is currently generating about 0.01 per unit of volatility. If you would invest  9,665  in RENIASSANCERE FIN INC on December 28, 2024 and sell it today you would earn a total of  34.00  from holding RENIASSANCERE FIN INC or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.41%
Values	Daily Returns

Chemours Co  vs.  RENIASSANCERE FIN INC

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.

RENIASSANCERE FIN INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RENIASSANCERE FIN INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, RENIASSANCERE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and RENIASSANCERE

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

The idea behind Chemours Co and RENIASSANCERE FIN 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.