Correlation Between Marchex and Chemours

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

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

Diversification Opportunities for Marchex and Chemours

0.32

Correlation Coefficient

Marchex  Chemours

Weak diversification

The 3 months correlation between Marchex and Chemours is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Marchex 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 Marchex 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 Marchex i.e., Marchex and Chemours go up and down completely randomly.

Pair Corralation between Marchex and Chemours

Given the investment horizon of 90 days Marchex is expected to under-perform the Chemours. In addition to that, Marchex is 1.12 times more volatile than Chemours Co. It trades about -0.19 of its total potential returns per unit of risk. Chemours Co is currently generating about -0.05 per unit of volatility. If you would invest  1,495  in Chemours Co on December 29, 2024 and sell it today you would lose (66.00) from holding Chemours Co or give up 4.41% of portfolio value over 90 days.

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

Marchex  vs.  Chemours Co

Marchex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Marchex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 latest fragile performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Marchex and Chemours

The main advantage of trading using opposite Marchex and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex 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 Marchex 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 Commodity Directory module to find actively traded commodities issued by global exchanges.