Correlation Between Chemours and Stepstone
Can any of the company-specific risk be diversified away by investing in both Chemours and Stepstone 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 Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemours Co and Stepstone Group, you can compare the effects of market volatilities on Chemours and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Stepstone.
Diversification Opportunities for Chemours and Stepstone
Very weak diversification
The 3 months correlation between Chemours and Stepstone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Chemours i.e., Chemours and Stepstone go up and down completely randomly.
Pair Corralation between Chemours and Stepstone
Allowing for the 90-day total investment horizon Chemours Co is expected to generate 1.57 times more return on investment than Stepstone. However, Chemours is 1.57 times more volatile than Stepstone Group. It trades about 0.04 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.21 per unit of risk. If you would invest 1,905 in Chemours Co on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Chemours Co or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemours Co vs. Stepstone Group
Performance |
| Timeline |
| Chemours |
| Stepstone Group |
Chemours and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemours and Stepstone
The main advantage of trading using opposite Chemours and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Chemours vs. Eastman Chemical | Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide |
| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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