Correlation Between Haydale Graphene and Chemours

Can any of the company-specific risk be diversified away by investing in both Haydale Graphene 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 Haydale Graphene and Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Haydale Graphene Industries and Chemours Co, you can compare the effects of market volatilities on Haydale Graphene 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 Haydale Graphene with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haydale Graphene and Chemours.

Diversification Opportunities for Haydale Graphene and Chemours

-0.37

Correlation Coefficient

Haydale Graphene  Chemours

Very good diversification

The 3 months correlation between Haydale and Chemours is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Haydale Graphene Industries and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Haydale Graphene 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 Haydale Graphene Industries 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 Haydale Graphene i.e., Haydale Graphene and Chemours go up and down completely randomly.

Pair Corralation between Haydale Graphene and Chemours

Assuming the 90 days horizon Haydale Graphene Industries is expected to generate 7.18 times more return on investment than Chemours. However, Haydale Graphene is 7.18 times more volatile than Chemours Co. It trades about 0.07 of its potential returns per unit of risk. Chemours Co is currently generating about 0.08 per unit of risk. If you would invest  0.41  in Haydale Graphene Industries on September 12, 2024 and sell it today you would lose (0.20) from holding Haydale Graphene Industries or give up 48.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Haydale Graphene Industries  vs.  Chemours Co

Haydale Graphene Ind

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haydale Graphene Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Haydale Graphene reported solid returns over the last few months and may actually be approaching a breakup point.

Chemours

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haydale Graphene and Chemours

The main advantage of trading using opposite Haydale Graphene and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haydale Graphene 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.

The idea behind Haydale Graphene Industries and Chemours Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..