Correlation Between Dupont De and Anglo American
Can any of the company-specific risk be diversified away by investing in both Dupont De and Anglo American 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 Anglo American 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 Anglo American plc, you can compare the effects of market volatilities on Dupont De and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Anglo American.
Diversification Opportunities for Dupont De and Anglo American
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Anglo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Anglo American plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American plc 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American plc has no effect on the direction of Dupont De i.e., Dupont De and Anglo American go up and down completely randomly.
Pair Corralation between Dupont De and Anglo American
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.47 times more return on investment than Anglo American. However, Dupont De Nemours is 2.12 times less risky than Anglo American. It trades about 0.03 of its potential returns per unit of risk. Anglo American plc is currently generating about 0.0 per unit of risk. If you would invest 8,026 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 333.00 from holding Dupont De Nemours or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dupont De Nemours vs. Anglo American plc
Performance |
| Timeline |
| Dupont De Nemours |
| Anglo American plc |
Dupont De and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Anglo American
The main advantage of trading using opposite Dupont De and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Anglo American vs. Glencore PLC ADR | Anglo American vs. Fortescue Metals Group | Anglo American vs. South32 Limited | Anglo American vs. South32 ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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