Correlation Between Givaudan and Chemours
Can any of the company-specific risk be diversified away by investing in both Givaudan 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 Givaudan and Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA ADR and Chemours Co, you can compare the effects of market volatilities on Givaudan 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 Givaudan with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Chemours.
Diversification Opportunities for Givaudan and Chemours
Very good diversification
The 3 months correlation between Givaudan and Chemours is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA ADR and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Givaudan 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 Givaudan SA ADR 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 Givaudan i.e., Givaudan and Chemours go up and down completely randomly.
Pair Corralation between Givaudan and Chemours
Assuming the 90 days horizon Givaudan SA ADR is expected to generate 0.3 times more return on investment than Chemours. However, Givaudan SA ADR is 3.37 times less risky than Chemours. It trades about 0.31 of its potential returns per unit of risk. Chemours Co is currently generating about 0.06 per unit of risk. If you would invest 8,622 in Givaudan SA ADR on September 14, 2024 and sell it today you would earn a total of 501.00 from holding Givaudan SA ADR or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Givaudan SA ADR vs. Chemours Co
Performance |
| Timeline |
| Givaudan SA ADR |
| Chemours |
Givaudan and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Chemours
The main advantage of trading using opposite Givaudan and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan 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.| Givaudan vs. Chemours Co | Givaudan vs. International Flavors Fragrances | Givaudan vs. Air Products and | Givaudan 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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