Correlation Between Chemours and Eastern
Can any of the company-specific risk be diversified away by investing in both Chemours and Eastern 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 Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Eastern Co, you can compare the effects of market volatilities on Chemours and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Eastern.
Diversification Opportunities for Chemours and Eastern
Good diversification
The 3 months correlation between Chemours and Eastern is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Chemours i.e., Chemours and Eastern go up and down completely randomly.
Pair Corralation between Chemours and Eastern
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Eastern. In addition to that, Chemours is 1.13 times more volatile than Eastern Co. It trades about -0.01 of its total potential returns per unit of risk. Eastern Co is currently generating about 0.04 per unit of volatility. If you would invest 2,085 in Eastern Co on September 1, 2024 and sell it today you would earn a total of 787.00 from holding Eastern Co or generate 37.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Eastern Co
Performance |
| Timeline |
| Chemours |
| Eastern |
Chemours and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Eastern
The main advantage of trading using opposite Chemours and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Eastern vs. Timken Company | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF | Eastern vs. Kennametal |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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