Correlation Between Graphene Manufacturing and Chemours

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

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

Diversification Opportunities for Graphene Manufacturing and Chemours

-0.45

Correlation Coefficient

Graphene Manufacturing  Chemours

Very good diversification

The 3 months correlation between Graphene and Chemours is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Graphene Manufacturing 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 Graphene Manufacturing Group 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 Graphene Manufacturing i.e., Graphene Manufacturing and Chemours go up and down completely randomly.

Pair Corralation between Graphene Manufacturing and Chemours

Assuming the 90 days horizon Graphene Manufacturing is expected to generate 4.88 times less return on investment than Chemours. In addition to that, Graphene Manufacturing is 1.76 times more volatile than Chemours Co. It trades about 0.02 of its total potential returns per unit of risk. Chemours Co is currently generating about 0.17 per unit of volatility. If you would invest  1,955  in Chemours Co on September 12, 2024 and sell it today you would earn a total of  162.00  from holding Chemours Co or generate 8.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Graphene Manufacturing Group  vs.  Chemours Co

Graphene Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graphene Manufacturing Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Graphene Manufacturing is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Chemours

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 9 (%) 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.

Pair Trading with Graphene Manufacturing and Chemours

The main advantage of trading using opposite Graphene Manufacturing and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing 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 Graphene Manufacturing Group and Chemours Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.