Correlation Between Chemours and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Chemours and Celsius Holdings 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 Chemours and Celsius Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Celsius Holdings, you can compare the effects of market volatilities on Chemours and Celsius Holdings 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 Chemours with a short position of Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Celsius Holdings.
Diversification Opportunities for Chemours and Celsius Holdings
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemours and Celsius is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings and Chemours 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 Chemours Co are associated (or correlated) with Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Chemours i.e., Chemours and Celsius Holdings go up and down completely randomly.
Pair Corralation between Chemours and Celsius Holdings
Allowing for the 90-day total investment horizon Chemours is expected to generate 2.61 times less return on investment than Celsius Holdings. But when comparing it to its historical volatility, Chemours Co is 1.08 times less risky than Celsius Holdings. It trades about 0.0 of its potential returns per unit of risk. Celsius Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,712 in Celsius Holdings on August 28, 2024 and sell it today you would lose (737.00) from holding Celsius Holdings or give up 19.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Celsius Holdings
Performance |
| Timeline |
| Chemours |
| Celsius Holdings |
Chemours and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Celsius Holdings
The main advantage of trading using opposite Chemours and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Celsius Holdings 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 Celsius Holdings will offset losses from the drop in Celsius Holdings' long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
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Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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