Correlation Between AGC and Chemours

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

By analyzing existing cross correlation between AGC Inc ADR and Chemours Co, you can compare the effects of market volatilities on AGC 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 AGC with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGC and Chemours.

Diversification Opportunities for AGC and Chemours

0.54

Correlation Coefficient

AGC  Chemours

Very weak diversification

The 3 months correlation between AGC and Chemours is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding AGC Inc ADR and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and AGC 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 AGC Inc 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 AGC i.e., AGC and Chemours go up and down completely randomly.

Pair Corralation between AGC and Chemours

Assuming the 90 days horizon AGC is expected to generate 2.92 times less return on investment than Chemours. In addition to that, AGC is 1.13 times more volatile than Chemours Co. It trades about 0.05 of its total potential returns per unit of risk. Chemours Co is currently generating about 0.17 per unit of volatility. If you would invest  1,772  in Chemours Co on October 21, 2024 and sell it today you would earn a total of  168.00  from holding Chemours Co or generate 9.48% return on investment over 90 days.

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

AGC Inc ADR  vs.  Chemours Co

AGC Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGC Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Chemours

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AGC and Chemours

The main advantage of trading using opposite AGC and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGC 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.

The idea behind AGC Inc ADR and Chemours Co 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.