Correlation Between Cooper Companies and Chemours

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

By analyzing existing cross correlation between The Cooper Companies and The Chemours, you can compare the effects of market volatilities on Cooper Companies and Chemours 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 Cooper Companies with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Companies and Chemours.

Diversification Opportunities for Cooper Companies and Chemours

-0.52

Correlation Coefficient

Cooper Companies  Chemours

Excellent diversification

The 3 months correlation between Cooper and Chemours is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Cooper Companies and The Chemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Cooper Companies 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 The Cooper Companies are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Cooper Companies i.e., Cooper Companies and Chemours go up and down completely randomly.

Pair Corralation between Cooper Companies and Chemours

Assuming the 90 days trading horizon The Cooper Companies is expected to under-perform the Chemours. In addition to that, Cooper Companies is 1.95 times more volatile than The Chemours. It trades about -0.08 of its total potential returns per unit of risk. The Chemours is currently generating about 0.15 per unit of volatility. If you would invest  37,996  in The Chemours on October 11, 2024 and sell it today you would earn a total of  2,894  from holding The Chemours or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

The Cooper Companies  vs.  The Chemours

Cooper Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Cooper Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Chemours

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Chemours are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cooper Companies and Chemours

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

The idea behind The Cooper Companies and The Chemours 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..