Correlation Between Dupont De and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Dupont De and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on Dupont De and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AMG Advanced.
Diversification Opportunities for Dupont De and AMG Advanced
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and AMG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Dupont De i.e., Dupont De and AMG Advanced go up and down completely randomly.
Pair Corralation between Dupont De and AMG Advanced
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.39 times less return on investment than AMG Advanced. But when comparing it to its historical volatility, Dupont De Nemours is 5.09 times less risky than AMG Advanced. It trades about 0.13 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,477 in AMG Advanced Metallurgical on November 4, 2024 and sell it today you would earn a total of 16.00 from holding AMG Advanced Metallurgical or generate 1.08% 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. AMG Advanced Metallurgical
Performance |
| Timeline |
| Dupont De Nemours |
| AMG Advanced Metallu |
Dupont De and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AMG Advanced
The main advantage of trading using opposite Dupont De and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| AMG Advanced vs. Huntsman Exploration | AMG Advanced vs. Aurelia Metals Limited | AMG Advanced vs. Adriatic Metals PLC | AMG Advanced vs. American Helium |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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