Correlation Between Chemours and Dupont De

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

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

Diversification Opportunities for Chemours and Dupont De

-0.29

Correlation Coefficient

Chemours  Dupont De

Very good diversification

The 3 months correlation between Chemours and Dupont is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours 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 Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Chemours i.e., Chemours and Dupont De go up and down completely randomly.

Pair Corralation between Chemours and Dupont De

Allowing for the 90-day total investment horizon Chemours Co is expected to generate 2.25 times more return on investment than Dupont De. However, Chemours is 2.25 times more volatile than Dupont De Nemours. It trades about 0.02 of its potential returns per unit of risk. Dupont De Nemours is currently generating about 0.03 per unit of risk. If you would invest  2,663  in Chemours Co on January 20, 2024 and sell it today you would lose (15.00) from holding Chemours Co or give up 0.56% of portfolio value over 90 days.

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

Chemours Co  vs.  Dupont De Nemours

Chemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chemours and Dupont De

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

The idea behind Chemours Co and Dupont De Nemours 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.