Correlation Between Dupont De and Seojin Automotive
Can any of the company-specific risk be diversified away by investing in both Dupont De and Seojin Automotive 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 Seojin Automotive 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 Seojin Automotive CoLtd, you can compare the effects of market volatilities on Dupont De and Seojin Automotive 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 Seojin Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Seojin Automotive.
Diversification Opportunities for Dupont De and Seojin Automotive
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and Seojin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Seojin Automotive CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin Automotive CoLtd 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 Seojin Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin Automotive CoLtd has no effect on the direction of Dupont De i.e., Dupont De and Seojin Automotive go up and down completely randomly.
Pair Corralation between Dupont De and Seojin Automotive
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.7 times more return on investment than Seojin Automotive. However, Dupont De Nemours is 1.44 times less risky than Seojin Automotive. It trades about 0.05 of its potential returns per unit of risk. Seojin Automotive CoLtd is currently generating about -0.08 per unit of risk. If you would invest 7,002 in Dupont De Nemours on September 4, 2024 and sell it today you would earn a total of 1,370 from holding Dupont De Nemours or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.15% |
| Values | Daily Returns |
Dupont De Nemours vs. Seojin Automotive CoLtd
Performance |
| Timeline |
| Dupont De Nemours |
| Seojin Automotive CoLtd |
Dupont De and Seojin Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Seojin Automotive
The main advantage of trading using opposite Dupont De and Seojin Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Seojin Automotive 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 Seojin Automotive will offset losses from the drop in Seojin Automotive's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Seojin Automotive vs. Korea Real Estate | Seojin Automotive vs. Busan Industrial Co | Seojin Automotive vs. UNISEM Co | Seojin Automotive vs. RPBio Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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