Correlation Between Akzo Nobel and Chemours
Can any of the company-specific risk be diversified away by investing in both Akzo Nobel 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 Akzo Nobel and Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akzo Nobel NV and Chemours Co, you can compare the effects of market volatilities on Akzo Nobel 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 Akzo Nobel with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akzo Nobel and Chemours.
Diversification Opportunities for Akzo Nobel and Chemours
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akzo and Chemours is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Akzo Nobel NV and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Akzo Nobel 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 Akzo Nobel NV 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 Akzo Nobel i.e., Akzo Nobel and Chemours go up and down completely randomly.
Pair Corralation between Akzo Nobel and Chemours
Assuming the 90 days horizon Akzo Nobel NV is expected to under-perform the Chemours. But the otc stock apears to be less risky and, when comparing its historical volatility, Akzo Nobel NV is 1.97 times less risky than Chemours. The otc stock trades about -0.06 of its potential returns per unit of risk. The Chemours Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,587 in Chemours Co on September 14, 2024 and sell it today you would lose (678.50) from holding Chemours Co or give up 26.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.03% |
| Values | Daily Returns |
Akzo Nobel NV vs. Chemours Co
Performance |
| Timeline |
| Akzo Nobel NV |
| Chemours |
Akzo Nobel and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akzo Nobel and Chemours
The main advantage of trading using opposite Akzo Nobel and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akzo Nobel 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.| Akzo Nobel vs. Chemours Co | Akzo Nobel vs. International Flavors Fragrances | Akzo Nobel vs. Air Products and | Akzo Nobel vs. PPG Industries |
| Chemours vs. Eastman Chemical | Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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