Correlation Between Dupont De and AirAsia X
Can any of the company-specific risk be diversified away by investing in both Dupont De and AirAsia X 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 AirAsia X 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 AirAsia X Bhd, you can compare the effects of market volatilities on Dupont De and AirAsia X 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 AirAsia X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AirAsia X.
Diversification Opportunities for Dupont De and AirAsia X
Good diversification
The 3 months correlation between Dupont and AirAsia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AirAsia X Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AirAsia X Bhd 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 AirAsia X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AirAsia X Bhd has no effect on the direction of Dupont De i.e., Dupont De and AirAsia X go up and down completely randomly.
Pair Corralation between Dupont De and AirAsia X
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.45 times more return on investment than AirAsia X. However, Dupont De Nemours is 2.24 times less risky than AirAsia X. It trades about 0.04 of its potential returns per unit of risk. AirAsia X Bhd is currently generating about -0.07 per unit of risk. If you would invest 7,685 in Dupont De Nemours on October 20, 2024 and sell it today you would earn a total of 62.00 from holding Dupont De Nemours or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dupont De Nemours vs. AirAsia X Bhd
Performance |
| Timeline |
| Dupont De Nemours |
| AirAsia X Bhd |
Dupont De and AirAsia X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AirAsia X
The main advantage of trading using opposite Dupont De and AirAsia X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AirAsia X 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 AirAsia X will offset losses from the drop in AirAsia X's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| AirAsia X vs. YX Precious Metals | AirAsia X vs. Star Media Group | AirAsia X vs. Central Industrial Corp | AirAsia X vs. Sapura Industrial Bhd |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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