Correlation Between Dupont De and PGF Capital
Can any of the company-specific risk be diversified away by investing in both Dupont De and PGF Capital 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 PGF Capital 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 PGF Capital Bhd, you can compare the effects of market volatilities on Dupont De and PGF Capital 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 PGF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and PGF Capital.
Diversification Opportunities for Dupont De and PGF Capital
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dupont and PGF is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and PGF Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGF Capital 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 PGF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGF Capital Bhd has no effect on the direction of Dupont De i.e., Dupont De and PGF Capital go up and down completely randomly.
Pair Corralation between Dupont De and PGF Capital
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.62 times more return on investment than PGF Capital. However, Dupont De Nemours is 1.6 times less risky than PGF Capital. It trades about 0.05 of its potential returns per unit of risk. PGF Capital Bhd is currently generating about -0.04 per unit of risk. If you would invest 8,250 in Dupont De Nemours on September 2, 2024 and sell it today you would earn a total of 109.00 from holding Dupont De Nemours or generate 1.32% 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. PGF Capital Bhd
Performance |
| Timeline |
| Dupont De Nemours |
| PGF Capital Bhd |
Dupont De and PGF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and PGF Capital
The main advantage of trading using opposite Dupont De and PGF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, PGF Capital 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 PGF Capital will offset losses from the drop in PGF Capital's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| PGF Capital vs. EA Technique M | PGF Capital vs. PIE Industrial Bhd | PGF Capital vs. Cosmos Technology International | PGF Capital vs. Sunzen Biotech 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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