Correlation Between Chemours and Western Copper
Can any of the company-specific risk be diversified away by investing in both Chemours and Western Copper 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 Copper 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 Copper and, you can compare the effects of market volatilities on Chemours and Western Copper 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 Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Western Copper.
Diversification Opportunities for Chemours and Western Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chemours and Western is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Chemours i.e., Chemours and Western Copper go up and down completely randomly.
Pair Corralation between Chemours and Western Copper
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.17 times more return on investment than Western Copper. However, Chemours is 1.17 times more volatile than Western Copper and. It trades about 0.17 of its potential returns per unit of risk. Western Copper and is currently generating about 0.02 per unit of risk. If you would invest 1,808 in Chemours Co on August 26, 2024 and sell it today you would earn a total of 272.00 from holding Chemours Co or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Western Copper and
Performance |
| Timeline |
| Chemours |
| Western Copper |
Chemours and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Western Copper
The main advantage of trading using opposite Chemours and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Western Copper 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 Copper will offset losses from the drop in Western Copper's long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Western Copper vs. Vale SA ADR | Western Copper vs. Teck Resources Ltd | Western Copper vs. MP Materials Corp | Western Copper vs. BHP Group Limited |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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