Correlation Between Stepan and Chemours

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

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

Diversification Opportunities for Stepan and Chemours

-0.26

Correlation Coefficient

Stepan  Chemours

Very good diversification

The 3 months correlation between Stepan and Chemours is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Stepan Company and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and Stepan 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 Stepan Company 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 Stepan i.e., Stepan and Chemours go up and down completely randomly.

Pair Corralation between Stepan and Chemours

Considering the 90-day investment horizon Stepan Company is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, Stepan Company is 2.11 times less risky than Chemours. The stock trades about -0.14 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,349  in Chemours Co on July 19, 2025 and sell it today you would lose (59.00) from holding Chemours Co or give up 4.37% of portfolio value over 90 days.

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

Stepan Company  vs.  Chemours Co

Stepan Company

Risk-Adjusted Performance

Weakest

Over the last 90 days Stepan Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in November 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Chemours

Risk-Adjusted Performance

Weakest

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stepan and Chemours

The main advantage of trading using opposite Stepan and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepan 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 Stepan Company 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.