Correlation Between Dupont De and AJ Advance
Can any of the company-specific risk be diversified away by investing in both Dupont De and AJ Advance 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 AJ Advance 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 AJ Advance Technology, you can compare the effects of market volatilities on Dupont De and AJ Advance 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 AJ Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AJ Advance.
Diversification Opportunities for Dupont De and AJ Advance
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and AJA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AJ Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Advance Technology 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 AJ Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Advance Technology has no effect on the direction of Dupont De i.e., Dupont De and AJ Advance go up and down completely randomly.
Pair Corralation between Dupont De and AJ Advance
Allowing for the 90-day total investment horizon Dupont De is expected to generate 164.64 times less return on investment than AJ Advance. But when comparing it to its historical volatility, Dupont De Nemours is 70.2 times less risky than AJ Advance. It trades about 0.03 of its potential returns per unit of risk. AJ Advance Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 23.00 in AJ Advance Technology on August 30, 2024 and sell it today you would lose (8.00) from holding AJ Advance Technology or give up 34.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Dupont De Nemours vs. AJ Advance Technology
Performance |
| Timeline |
| Dupont De Nemours |
| AJ Advance Technology |
Dupont De and AJ Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AJ Advance
The main advantage of trading using opposite Dupont De and AJ Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AJ Advance 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 AJ Advance will offset losses from the drop in AJ Advance's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| AJ Advance vs. CP ALL Public | AJ Advance vs. Bangkok Dusit Medical | AJ Advance vs. Central Pattana Public | AJ Advance vs. Advanced Info Service |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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