Correlation Between Dupont De and CIMB Group
Can any of the company-specific risk be diversified away by investing in both Dupont De and CIMB Group 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 CIMB Group 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 CIMB Group Holdings, you can compare the effects of market volatilities on Dupont De and CIMB Group 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 CIMB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and CIMB Group.
Diversification Opportunities for Dupont De and CIMB Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and CIMB is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and CIMB Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB Group Holdings 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 CIMB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB Group Holdings has no effect on the direction of Dupont De i.e., Dupont De and CIMB Group go up and down completely randomly.
Pair Corralation between Dupont De and CIMB Group
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the CIMB Group. In addition to that, Dupont De is 1.48 times more volatile than CIMB Group Holdings. It trades about -0.23 of its total potential returns per unit of risk. CIMB Group Holdings is currently generating about -0.08 per unit of volatility. If you would invest 707.00 in CIMB Group Holdings on January 13, 2025 and sell it today you would lose (42.00) from holding CIMB Group Holdings or give up 5.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Dupont De Nemours vs. CIMB Group Holdings
Performance |
| Timeline |
| Dupont De Nemours |
| CIMB Group Holdings |
Dupont De and CIMB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and CIMB Group
The main advantage of trading using opposite Dupont De and CIMB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, CIMB Group 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 CIMB Group will offset losses from the drop in CIMB Group's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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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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