Correlation Between Chemours and Constellation Brands
Can any of the company-specific risk be diversified away by investing in both Chemours and Constellation Brands 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 Constellation Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Constellation Brands Class, you can compare the effects of market volatilities on Chemours and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Constellation Brands.
Diversification Opportunities for Chemours and Constellation Brands
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chemours and Constellation is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of Chemours i.e., Chemours and Constellation Brands go up and down completely randomly.
Pair Corralation between Chemours and Constellation Brands
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 2.64 times more return on investment than Constellation Brands. However, Chemours is 2.64 times more volatile than Constellation Brands Class. It trades about 0.0 of its potential returns per unit of risk. Constellation Brands Class is currently generating about 0.0 per unit of risk. If you would invest 2,761 in Chemours Co on August 29, 2024 and sell it today you would lose (569.00) from holding Chemours Co or give up 20.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Constellation Brands Class
Performance |
| Timeline |
| Chemours |
| Constellation Brands |
Chemours and Constellation Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Constellation Brands
The main advantage of trading using opposite Chemours and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |