Correlation Between European Metals and Chemours
Can any of the company-specific risk be diversified away by investing in both European Metals and Chemours 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 European Metals and Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Chemours Co, you can compare the effects of market volatilities on European Metals and Chemours 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 European Metals with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Chemours.
Diversification Opportunities for European Metals and Chemours
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Chemours is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and European Metals 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 European Metals Holdings are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of European Metals i.e., European Metals and Chemours go up and down completely randomly.
Pair Corralation between European Metals and Chemours
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Chemours. In addition to that, European Metals is 1.15 times more volatile than Chemours Co. It trades about -0.09 of its total potential returns per unit of risk. Chemours Co is currently generating about -0.02 per unit of volatility. If you would invest 2,940 in Chemours Co on September 12, 2024 and sell it today you would lose (935.00) from holding Chemours Co or give up 31.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.99% |
| Values | Daily Returns |
European Metals Holdings vs. Chemours Co
Performance |
| Timeline |
| European Metals Holdings |
| Chemours |
European Metals and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Chemours
The main advantage of trading using opposite European Metals and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| European Metals vs. National Bank of | European Metals vs. Alior Bank SA | European Metals vs. Solstad Offshore ASA | European Metals vs. St Galler Kantonalbank |
| Chemours vs. Ameriprise Financial | Chemours vs. Royal Bank of | Chemours vs. Komercni Banka | Chemours vs. European Metals Holdings |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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