Correlation Between Dupont De and GrandTech
Can any of the company-specific risk be diversified away by investing in both Dupont De and GrandTech 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 GrandTech 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 GrandTech CG Systems, you can compare the effects of market volatilities on Dupont De and GrandTech 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 GrandTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and GrandTech.
Diversification Opportunities for Dupont De and GrandTech
Average diversification
The 3 months correlation between Dupont and GrandTech is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and GrandTech CG Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrandTech CG Systems 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 GrandTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrandTech CG Systems has no effect on the direction of Dupont De i.e., Dupont De and GrandTech go up and down completely randomly.
Pair Corralation between Dupont De and GrandTech
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.47 times more return on investment than GrandTech. However, Dupont De is 1.47 times more volatile than GrandTech CG Systems. It trades about 0.02 of its potential returns per unit of risk. GrandTech CG Systems is currently generating about -0.27 per unit of risk. If you would invest 8,344 in Dupont De Nemours on August 30, 2024 and sell it today you would earn a total of 46.00 from holding Dupont De Nemours or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. GrandTech CG Systems
Performance |
| Timeline |
| Dupont De Nemours |
| GrandTech CG Systems |
Dupont De and GrandTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and GrandTech
The main advantage of trading using opposite Dupont De and GrandTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, GrandTech 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 GrandTech will offset losses from the drop in GrandTech's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| GrandTech vs. Jia Jie Biomedical | GrandTech vs. BRIM Biotechnology | GrandTech vs. Onyx Healthcare | GrandTech vs. Genovate Biotechnology 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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