Correlation Between SPDR Series and Chemours

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

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

Diversification Opportunities for SPDR Series and Chemours

0.31

Correlation Coefficient

SPDR Series  Chemours

Weak diversification

The 3 months correlation between SPDR and Chemours is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and The Chemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and SPDR Series 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 SPDR Series Trust 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 SPDR Series i.e., SPDR Series and Chemours go up and down completely randomly.

Pair Corralation between SPDR Series and Chemours

Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 0.64 times more return on investment than Chemours. However, SPDR Series Trust is 1.57 times less risky than Chemours. It trades about 0.01 of its potential returns per unit of risk. The Chemours is currently generating about -0.18 per unit of risk. If you would invest  262,670  in SPDR Series Trust on December 20, 2024 and sell it today you would earn a total of  830.00  from holding SPDR Series Trust or generate 0.32% return on investment over 90 days.

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

SPDR Series Trust  vs.  The Chemours

SPDR Series Trust

Risk-Adjusted Performance

Weak

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

Chemours

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Chemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SPDR Series and Chemours

The main advantage of trading using opposite SPDR Series and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series 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 SPDR Series Trust 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.