Correlation Between Dupont De and Active Health
Can any of the company-specific risk be diversified away by investing in both Dupont De and Active Health 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 Active Health 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 Active Health Foods, you can compare the effects of market volatilities on Dupont De and Active Health 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 Active Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Active Health.
Diversification Opportunities for Dupont De and Active Health
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Active is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Active Health Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Active Health Foods 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 Active Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Active Health Foods has no effect on the direction of Dupont De i.e., Dupont De and Active Health go up and down completely randomly.
Pair Corralation between Dupont De and Active Health
Allowing for the 90-day total investment horizon Dupont De is expected to generate 63.93 times less return on investment than Active Health. But when comparing it to its historical volatility, Dupont De Nemours is 33.75 times less risky than Active Health. It trades about 0.03 of its potential returns per unit of risk. Active Health Foods is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Active Health Foods on August 26, 2024 and sell it today you would lose (0.02) from holding Active Health Foods or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dupont De Nemours vs. Active Health Foods
Performance |
| Timeline |
| Dupont De Nemours |
| Active Health Foods |
Dupont De and Active Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Active Health
The main advantage of trading using opposite Dupont De and Active Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Active Health 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 Active Health will offset losses from the drop in Active Health's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Active Health vs. Ventana Biotech | Active Health vs. Gold Ent Group | Active Health vs. Profitable Develop | Active Health vs. American Leisure Holdings |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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