Correlation Between Chemours and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Chemours and Western Acquisition 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 Western Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Western Acquisition Ventures, you can compare the effects of market volatilities on Chemours and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Western Acquisition.
Diversification Opportunities for Chemours and Western Acquisition
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chemours and Western is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Chemours i.e., Chemours and Western Acquisition go up and down completely randomly.
Pair Corralation between Chemours and Western Acquisition
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 2.26 times more return on investment than Western Acquisition. However, Chemours is 2.26 times more volatile than Western Acquisition Ventures. It trades about 0.22 of its potential returns per unit of risk. Western Acquisition Ventures is currently generating about -0.11 per unit of risk. If you would invest 1,805 in Chemours Co on August 30, 2024 and sell it today you would earn a total of 377.00 from holding Chemours Co or generate 20.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Western Acquisition Ventures
Performance |
| Timeline |
| Chemours |
| Western Acquisition |
Chemours and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Western Acquisition
The main advantage of trading using opposite Chemours and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition's long position.| Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
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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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