Correlation Between Chemours and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Chemours and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Regions Financial, you can compare the effects of market volatilities on Chemours and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Regions Financial.
Diversification Opportunities for Chemours and Regions Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemours and Regions is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Chemours i.e., Chemours and Regions Financial go up and down completely randomly.
Pair Corralation between Chemours and Regions Financial
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Regions Financial. In addition to that, Chemours is 1.81 times more volatile than Regions Financial. It trades about 0.0 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.06 per unit of volatility. If you would invest 1,781 in Regions Financial on November 8, 2024 and sell it today you would earn a total of 27.00 from holding Regions Financial or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Chemours Co vs. Regions Financial
Performance |
| Timeline |
| Chemours |
| Regions Financial |
Chemours and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Regions Financial
The main advantage of trading using opposite Chemours and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Regions Financial vs. Sphere Entertainment Co | Regions Financial vs. Coty Inc | Regions Financial vs. Sun Country Airlines | Regions Financial vs. NETGEAR |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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