Correlation Between Novozymes A/S and Chemours
Can any of the company-specific risk be diversified away by investing in both Novozymes A/S 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 Novozymes A/S and Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novozymes AS B and Chemours Co, you can compare the effects of market volatilities on Novozymes A/S 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 Novozymes A/S with a short position of Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novozymes A/S and Chemours.
Diversification Opportunities for Novozymes A/S and Chemours
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Novozymes and Chemours is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Novozymes AS B and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Novozymes A/S 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 Novozymes AS B 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 Novozymes A/S i.e., Novozymes A/S and Chemours go up and down completely randomly.
Pair Corralation between Novozymes A/S and Chemours
Assuming the 90 days horizon Novozymes AS B is expected to generate 0.82 times more return on investment than Chemours. However, Novozymes AS B is 1.22 times less risky than Chemours. It trades about 0.06 of its potential returns per unit of risk. Chemours Co is currently generating about -0.04 per unit of risk. If you would invest 4,207 in Novozymes AS B on December 2, 2024 and sell it today you would earn a total of 1,858 from holding Novozymes AS B or generate 44.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 80.27% |
Values | Daily Returns |
Novozymes AS B vs. Chemours Co
Performance |
Timeline |
Novozymes AS B |
Chemours |
Novozymes A/S and Chemours Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Novozymes A/S and Chemours
The main advantage of trading using opposite Novozymes A/S and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novozymes A/S 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.Novozymes A/S vs. Symrise Ag PK | Novozymes A/S vs. Givaudan SA | Novozymes A/S vs. Sika AG | Novozymes A/S vs. Sika AG ADR |
Chemours vs. International Flavors Fragrances | Chemours vs. Air Products and | Chemours vs. PPG Industries | Chemours vs. Linde plc Ordinary |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Commodity Directory Find actively traded commodities issued by global exchanges |