Correlation Between Chemours and Marine Products
Can any of the company-specific risk be diversified away by investing in both Chemours and Marine Products 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 Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Marine Products, you can compare the effects of market volatilities on Chemours and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Marine Products.
Diversification Opportunities for Chemours and Marine Products
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemours and Marine is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Chemours i.e., Chemours and Marine Products go up and down completely randomly.
Pair Corralation between Chemours and Marine Products
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Marine Products. In addition to that, Chemours is 1.48 times more volatile than Marine Products. It trades about -0.01 of its total potential returns per unit of risk. Marine Products is currently generating about 0.01 per unit of volatility. If you would invest 1,002 in Marine Products on September 1, 2024 and sell it today you would lose (13.00) from holding Marine Products or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Marine Products
Performance |
| Timeline |
| Chemours |
| Marine Products |
Chemours and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Marine Products
The main advantage of trading using opposite Chemours and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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