Correlation Between Chemours and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both Chemours and Carbios SAS 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 Carbios SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Carbios SAS, you can compare the effects of market volatilities on Chemours and Carbios SAS 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 Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Carbios SAS.
Diversification Opportunities for Chemours and Carbios SAS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chemours and Carbios is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS 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 Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of Chemours i.e., Chemours and Carbios SAS go up and down completely randomly.
Pair Corralation between Chemours and Carbios SAS
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 0.82 times more return on investment than Carbios SAS. However, Chemours Co is 1.22 times less risky than Carbios SAS. It trades about -0.01 of its potential returns per unit of risk. Carbios SAS is currently generating about -0.05 per unit of risk. If you would invest 2,861 in Chemours Co on September 16, 2024 and sell it today you would lose (957.00) from holding Chemours Co or give up 33.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Carbios SAS
Performance |
| Timeline |
| Chemours |
| Carbios SAS |
Chemours and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Carbios SAS
The main advantage of trading using opposite Chemours and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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