Correlation Between Chemours and Hawkins
Can any of the company-specific risk be diversified away by investing in both Chemours and Hawkins 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 Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Hawkins, you can compare the effects of market volatilities on Chemours and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Hawkins.
Diversification Opportunities for Chemours and Hawkins
Very weak diversification
The 3 months correlation between Chemours and Hawkins is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Chemours i.e., Chemours and Hawkins go up and down completely randomly.
Pair Corralation between Chemours and Hawkins
Allowing for the 90-day total investment horizon Chemours is expected to generate 11.5 times less return on investment than Hawkins. In addition to that, Chemours is 1.42 times more volatile than Hawkins. It trades about 0.01 of its total potential returns per unit of risk. Hawkins is currently generating about 0.11 per unit of volatility. If you would invest 5,687 in Hawkins on October 25, 2024 and sell it today you would earn a total of 6,148 from holding Hawkins or generate 108.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Hawkins
Performance |
| Timeline |
| Chemours |
| Hawkins |
Chemours and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Hawkins
The main advantage of trading using opposite Chemours and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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