Correlation Between Dupont De and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Dupont De and AFC Gamma 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 AFC Gamma 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 AFC Gamma, you can compare the effects of market volatilities on Dupont De and AFC Gamma 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 AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AFC Gamma.
Diversification Opportunities for Dupont De and AFC Gamma
Poor diversification
The 3 months correlation between Dupont and AFC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma 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 AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Dupont De i.e., Dupont De and AFC Gamma go up and down completely randomly.
Pair Corralation between Dupont De and AFC Gamma
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.72 times less return on investment than AFC Gamma. But when comparing it to its historical volatility, Dupont De Nemours is 1.29 times less risky than AFC Gamma. It trades about 0.01 of its potential returns per unit of risk. AFC Gamma is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 752.00 in AFC Gamma on November 2, 2024 and sell it today you would earn a total of 65.00 from holding AFC Gamma or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. AFC Gamma
Performance |
| Timeline |
| Dupont De Nemours |
| AFC Gamma |
Dupont De and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AFC Gamma
The main advantage of trading using opposite Dupont De and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Dupont De vs. Aquagold International | Dupont De vs. MicroAlgo | Dupont De vs. Aeye Inc | Dupont De vs. Coca Cola Consolidated |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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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