Correlation Between Ashland Global and Dupont De
Can any of the company-specific risk be diversified away by investing in both Ashland Global and Dupont De 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 Ashland Global and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashland Global Holdings and Dupont De Nemours, you can compare the effects of market volatilities on Ashland Global and Dupont De 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 Ashland Global with a short position of Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashland Global and Dupont De.
Diversification Opportunities for Ashland Global and Dupont De
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ashland and Dupont is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ashland Global Holdings and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours and Ashland Global 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 Ashland Global Holdings are associated (or correlated) with Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Ashland Global i.e., Ashland Global and Dupont De go up and down completely randomly.
Pair Corralation between Ashland Global and Dupont De
Considering the 90-day investment horizon Ashland Global Holdings is expected to under-perform the Dupont De. In addition to that, Ashland Global is 2.36 times more volatile than Dupont De Nemours. It trades about -0.16 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about 0.08 per unit of volatility. If you would invest 7,543 in Dupont De Nemours on November 2, 2024 and sell it today you would earn a total of 123.00 from holding Dupont De Nemours or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashland Global Holdings vs. Dupont De Nemours
Performance |
| Timeline |
| Ashland Global Holdings |
| Dupont De Nemours |
Ashland Global and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashland Global and Dupont De
The main advantage of trading using opposite Ashland Global and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashland Global position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De's long position.| Ashland Global vs. H B Fuller | Ashland Global vs. Element Solutions | Ashland Global vs. Balchem | Ashland Global vs. Avantor |
| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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