Correlation Between PSQ Holdings and Chemours

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

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

Diversification Opportunities for PSQ Holdings and Chemours

-0.25

Correlation Coefficient

PSQ Holdings  Chemours

Very good diversification

The 3 months correlation between PSQ and Chemours is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PSQ Holdings and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and PSQ Holdings 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 PSQ Holdings 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 PSQ Holdings i.e., PSQ Holdings and Chemours go up and down completely randomly.

Pair Corralation between PSQ Holdings and Chemours

Given the investment horizon of 90 days PSQ Holdings is expected to generate 4.53 times more return on investment than Chemours. However, PSQ Holdings is 4.53 times more volatile than Chemours Co. It trades about 0.03 of its potential returns per unit of risk. Chemours Co is currently generating about -0.01 per unit of risk. If you would invest  604.00  in PSQ Holdings on October 11, 2024 and sell it today you would lose (199.00) from holding PSQ Holdings or give up 32.95% of portfolio value over 90 days.

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

PSQ Holdings  vs.  Chemours Co

PSQ Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PSQ Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PSQ Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 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 PSQ Holdings and Chemours

The main advantage of trading using opposite PSQ Holdings and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSQ Holdings 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 PSQ Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.