Correlation Between Dupont De and Ampol
Can any of the company-specific risk be diversified away by investing in both Dupont De and Ampol 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 Ampol 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 Ampol, you can compare the effects of market volatilities on Dupont De and Ampol 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 Ampol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Ampol.
Diversification Opportunities for Dupont De and Ampol
Very weak diversification
The 3 months correlation between Dupont and Ampol is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Ampol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampol 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 Ampol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampol has no effect on the direction of Dupont De i.e., Dupont De and Ampol go up and down completely randomly.
Pair Corralation between Dupont De and Ampol
Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.17 times less return on investment than Ampol. In addition to that, Dupont De is 1.03 times more volatile than Ampol. It trades about 0.03 of its total potential returns per unit of risk. Ampol is currently generating about 0.12 per unit of volatility. If you would invest 2,790 in Ampol on September 1, 2024 and sell it today you would earn a total of 119.00 from holding Ampol or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dupont De Nemours vs. Ampol
Performance |
| Timeline |
| Dupont De Nemours |
| Ampol |
Dupont De and Ampol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Ampol
The main advantage of trading using opposite Dupont De and Ampol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Ampol 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 Ampol will offset losses from the drop in Ampol's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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