Correlation Between Chemours and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Chemours and Avient Corp 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 Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Avient Corp, you can compare the effects of market volatilities on Chemours and Avient Corp 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 Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Avient Corp.
Diversification Opportunities for Chemours and Avient Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemours and Avient is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp 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 Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of Chemours i.e., Chemours and Avient Corp go up and down completely randomly.
Pair Corralation between Chemours and Avient Corp
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 2.1 times more return on investment than Avient Corp. However, Chemours is 2.1 times more volatile than Avient Corp. It trades about 0.16 of its potential returns per unit of risk. Avient Corp is currently generating about 0.15 per unit of risk. If you would invest 1,836 in Chemours Co on August 25, 2024 and sell it today you would earn a total of 244.00 from holding Chemours Co or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Avient Corp
Performance |
| Timeline |
| Chemours |
| Avient Corp |
Chemours and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Avient Corp
The main advantage of trading using opposite Chemours and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |