Correlation Between Chemours and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Chemours and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and National CineMedia, you can compare the effects of market volatilities on Chemours and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and National CineMedia.
Diversification Opportunities for Chemours and National CineMedia
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemours and National is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Chemours i.e., Chemours and National CineMedia go up and down completely randomly.
Pair Corralation between Chemours and National CineMedia
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.38 times more return on investment than National CineMedia. However, Chemours is 1.38 times more volatile than National CineMedia. It trades about 0.24 of its potential returns per unit of risk. National CineMedia is currently generating about -0.04 per unit of risk. If you would invest 1,793 in Chemours Co on September 1, 2024 and sell it today you would earn a total of 381.00 from holding Chemours Co or generate 21.25% 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. National CineMedia
Performance |
| Timeline |
| Chemours |
| National CineMedia |
Chemours and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and National CineMedia
The main advantage of trading using opposite Chemours and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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