Correlation Between Dupont De and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Dupont De and Commerzbank 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 Dupont De and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Commerzbank AG, you can compare the effects of market volatilities on Dupont De and Commerzbank 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 Dupont De with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Commerzbank.
Diversification Opportunities for Dupont De and Commerzbank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Commerzbank is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Commerzbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG and Dupont De 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 Dupont De Nemours are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG has no effect on the direction of Dupont De i.e., Dupont De and Commerzbank go up and down completely randomly.
Pair Corralation between Dupont De and Commerzbank
Assuming the 90 days trading horizon Dupont De is expected to generate 3.32 times less return on investment than Commerzbank. But when comparing it to its historical volatility, Dupont De Nemours is 1.46 times less risky than Commerzbank. It trades about 0.03 of its potential returns per unit of risk. Commerzbank AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 746.00 in Commerzbank AG on August 26, 2024 and sell it today you would earn a total of 789.00 from holding Commerzbank AG or generate 105.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Commerzbank AG
Performance |
| Timeline |
| Dupont De Nemours |
| Commerzbank AG |
Dupont De and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Commerzbank
The main advantage of trading using opposite Dupont De and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Dupont De vs. Nok Airlines PCL | Dupont De vs. GungHo Online Entertainment | Dupont De vs. JAPAN AIRLINES | Dupont De vs. Lendlease Group |
| Commerzbank vs. KRISPY KREME DL 01 | Commerzbank vs. Iridium Communications | Commerzbank vs. HEMISPHERE EGY | Commerzbank vs. PACIFIC ONLINE |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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