Correlation Between Dupont De and Aena SA
Can any of the company-specific risk be diversified away by investing in both Dupont De and Aena SA 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 Aena SA 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 Aena SA, you can compare the effects of market volatilities on Dupont De and Aena SA 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 Aena SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Aena SA.
Diversification Opportunities for Dupont De and Aena SA
Very weak diversification
The 3 months correlation between Dupont and Aena is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Aena SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SA 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 Aena SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SA has no effect on the direction of Dupont De i.e., Dupont De and Aena SA go up and down completely randomly.
Pair Corralation between Dupont De and Aena SA
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.7 times more return on investment than Aena SA. However, Dupont De is 1.7 times more volatile than Aena SA. It trades about 0.01 of its potential returns per unit of risk. Aena SA is currently generating about -0.13 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Dupont De Nemours or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Aena SA
Performance |
| Timeline |
| Dupont De Nemours |
| Aena SA |
Dupont De and Aena SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Aena SA
The main advantage of trading using opposite Dupont De and Aena SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Aena SA 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 Aena SA will offset losses from the drop in Aena SA's long position.| Dupont De vs. Direxion Daily FTSE | Dupont De vs. Collegium Pharmaceutical | Dupont De vs. KKR Co LP | Dupont De vs. iShares Dividend and |
| Aena SA vs. NH Hoteles | Aena SA vs. All Iron Re | Aena SA vs. Caixabank SA | Aena SA vs. Home Capital Rentals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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