Correlation Between Dupont De and Greatek Electronics
Can any of the company-specific risk be diversified away by investing in both Dupont De and Greatek Electronics 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 Greatek Electronics 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 Greatek Electronics, you can compare the effects of market volatilities on Dupont De and Greatek Electronics 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 Greatek Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Greatek Electronics.
Diversification Opportunities for Dupont De and Greatek Electronics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Greatek is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Greatek Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greatek Electronics 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 Greatek Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greatek Electronics has no effect on the direction of Dupont De i.e., Dupont De and Greatek Electronics go up and down completely randomly.
Pair Corralation between Dupont De and Greatek Electronics
Allowing for the 90-day total investment horizon Dupont De is expected to generate 3.18 times less return on investment than Greatek Electronics. In addition to that, Dupont De is 1.47 times more volatile than Greatek Electronics. It trades about 0.1 of its total potential returns per unit of risk. Greatek Electronics is currently generating about 0.48 per unit of volatility. If you would invest 5,900 in Greatek Electronics on November 5, 2024 and sell it today you would earn a total of 300.00 from holding Greatek Electronics or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Dupont De Nemours vs. Greatek Electronics
Performance |
| Timeline |
| Dupont De Nemours |
| Greatek Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Dupont De and Greatek Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Greatek Electronics
The main advantage of trading using opposite Dupont De and Greatek Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Greatek Electronics 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 Greatek Electronics will offset losses from the drop in Greatek Electronics' long position.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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