Correlation Between Chemours and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Chemours and Flexible Solutions 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 Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Flexible Solutions International, you can compare the effects of market volatilities on Chemours and Flexible Solutions 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 Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Flexible Solutions.
Diversification Opportunities for Chemours and Flexible Solutions
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chemours and Flexible is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions 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 Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Chemours i.e., Chemours and Flexible Solutions go up and down completely randomly.
Pair Corralation between Chemours and Flexible Solutions
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 0.9 times more return on investment than Flexible Solutions. However, Chemours Co is 1.11 times less risky than Flexible Solutions. It trades about 0.22 of its potential returns per unit of risk. Flexible Solutions International is currently generating about -0.01 per unit of risk. If you would invest 1,824 in Chemours Co on August 29, 2024 and sell it today you would earn a total of 368.00 from holding Chemours Co or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Flexible Solutions Internation
Performance |
| Timeline |
| Chemours |
| Flexible Solutions |
Chemours and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Flexible Solutions
The main advantage of trading using opposite Chemours and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies | Flexible Solutions vs. Cabot |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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