Correlation Between Chemours and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Chemours and Safety Shot 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 Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Safety Shot, you can compare the effects of market volatilities on Chemours and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Safety Shot.
Diversification Opportunities for Chemours and Safety Shot
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chemours and Safety is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Chemours i.e., Chemours and Safety Shot go up and down completely randomly.
Pair Corralation between Chemours and Safety Shot
Allowing for the 90-day total investment horizon Chemours Co is expected to under-perform the Safety Shot. But the stock apears to be less risky and, when comparing its historical volatility, Chemours Co is 2.23 times less risky than Safety Shot. The stock trades about -0.02 of its potential returns per unit of risk. The Safety Shot is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Safety Shot on October 14, 2024 and sell it today you would lose (5.00) from holding Safety Shot or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Safety Shot
Performance |
| Timeline |
| Chemours |
| Safety Shot |
Chemours and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Safety Shot
The main advantage of trading using opposite Chemours and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
| Safety Shot vs. Hawkins | Safety Shot vs. Codexis | Safety Shot vs. Chemours Co | Safety Shot vs. National CineMedia |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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