Correlation Between Dupont De and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Dupont De and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on Dupont De and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BGF Retail.
Diversification Opportunities for Dupont De and BGF Retail
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dupont and BGF is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Dupont De i.e., Dupont De and BGF Retail go up and down completely randomly.
Pair Corralation between Dupont De and BGF Retail
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.72 times more return on investment than BGF Retail. However, Dupont De Nemours is 1.4 times less risky than BGF Retail. It trades about 0.03 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.12 per unit of risk. If you would invest 8,299 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Dupont De Nemours or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. BGF Retail Co
Performance |
| Timeline |
| Dupont De Nemours |
| BGF Retail |
Dupont De and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BGF Retail
The main advantage of trading using opposite Dupont De and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| BGF Retail vs. Korea Real Estate | BGF Retail vs. Korea Ratings Co | BGF Retail vs. IQuest Co | BGF Retail vs. Wonbang Tech Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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