Correlation Between Chemours and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both Chemours and X-FAB Silicon 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 X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and X FAB Silicon Foundries, you can compare the effects of market volatilities on Chemours and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and X-FAB Silicon.
Diversification Opportunities for Chemours and X-FAB Silicon
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chemours and X-FAB is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Chemours i.e., Chemours and X-FAB Silicon go up and down completely randomly.
Pair Corralation between Chemours and X-FAB Silicon
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.35 times more return on investment than X-FAB Silicon. However, Chemours is 1.35 times more volatile than X FAB Silicon Foundries. It trades about 0.17 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.3 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Chemours |
| X FAB Silicon |
Chemours and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and X-FAB Silicon
The main advantage of trading using opposite Chemours and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| X-FAB Silicon vs. NVIDIA | X-FAB Silicon vs. Intel | X-FAB Silicon vs. Taiwan Semiconductor Manufacturing | X-FAB Silicon vs. Marvell Technology Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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