Correlation Between Chemours and GAMCO Global

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

By analyzing existing cross correlation between Chemours Co and GAMCO Global Gold, you can compare the effects of market volatilities on Chemours and GAMCO Global 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 GAMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and GAMCO Global.

Diversification Opportunities for Chemours and GAMCO Global

0.13

Correlation Coefficient

Chemours  GAMCO Global

Average diversification

The 3 months correlation between Chemours and GAMCO is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and GAMCO Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Global Gold 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 GAMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Global Gold has no effect on the direction of Chemours i.e., Chemours and GAMCO Global go up and down completely randomly.

Pair Corralation between Chemours and GAMCO Global

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 3.61 times more return on investment than GAMCO Global. However, Chemours is 3.61 times more volatile than GAMCO Global Gold. It trades about 0.03 of its potential returns per unit of risk. GAMCO Global Gold is currently generating about -0.25 per unit of risk. If you would invest  1,863  in Chemours Co on August 20, 2024 and sell it today you would earn a total of  26.00  from holding Chemours Co or generate 1.4% 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.  GAMCO Global Gold

Chemours

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in December 2024.

GAMCO Global Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GAMCO Global Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GAMCO Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chemours and GAMCO Global

The main advantage of trading using opposite Chemours and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, GAMCO Global 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 GAMCO Global will offset losses from the drop in GAMCO Global's long position.

The idea behind Chemours Co and GAMCO Global Gold 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.