Correlation Between Dupont De and FinecoBank SpA
Can any of the company-specific risk be diversified away by investing in both Dupont De and FinecoBank SpA 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 FinecoBank SpA 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 FinecoBank SpA, you can compare the effects of market volatilities on Dupont De and FinecoBank SpA 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 FinecoBank SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and FinecoBank SpA.
Diversification Opportunities for Dupont De and FinecoBank SpA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dupont and FinecoBank is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA 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 FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of Dupont De i.e., Dupont De and FinecoBank SpA go up and down completely randomly.
Pair Corralation between Dupont De and FinecoBank SpA
Allowing for the 90-day total investment horizon Dupont De is expected to generate 13.56 times less return on investment than FinecoBank SpA. But when comparing it to its historical volatility, Dupont De Nemours is 1.14 times less risky than FinecoBank SpA. It trades about 0.03 of its potential returns per unit of risk. FinecoBank SpA is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,658 in FinecoBank SpA on October 25, 2024 and sell it today you would earn a total of 144.00 from holding FinecoBank SpA or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dupont De Nemours vs. FinecoBank SpA
Performance |
| Timeline |
| Dupont De Nemours |
| FinecoBank SpA |
Dupont De and FinecoBank SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and FinecoBank SpA
The main advantage of trading using opposite Dupont De and FinecoBank SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, FinecoBank SpA 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 FinecoBank SpA will offset losses from the drop in FinecoBank SpA's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| FinecoBank SpA vs. United Utilities Group | FinecoBank SpA vs. BW Offshore | FinecoBank SpA vs. BE Semiconductor Industries | FinecoBank SpA vs. Ecofin Global Utilities |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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