Correlation Between Dupont De and Salomon A
Can any of the company-specific risk be diversified away by investing in both Dupont De and Salomon A 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 Salomon A 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 Salomon A Angel, you can compare the effects of market volatilities on Dupont De and Salomon A 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 Salomon A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Salomon A.
Diversification Opportunities for Dupont De and Salomon A
Good diversification
The 3 months correlation between Dupont and Salomon is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Salomon A Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salomon A Angel 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 Salomon A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salomon A Angel has no effect on the direction of Dupont De i.e., Dupont De and Salomon A go up and down completely randomly.
Pair Corralation between Dupont De and Salomon A
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Salomon A. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.74 times less risky than Salomon A. The stock trades about -0.01 of its potential returns per unit of risk. The Salomon A Angel is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 310,000 in Salomon A Angel on August 27, 2024 and sell it today you would earn a total of 18,400 from holding Salomon A Angel or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Dupont De Nemours vs. Salomon A Angel
Performance |
| Timeline |
| Dupont De Nemours |
| Salomon A Angel |
Dupont De and Salomon A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Salomon A
The main advantage of trading using opposite Dupont De and Salomon A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Salomon A 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 Salomon A will offset losses from the drop in Salomon A's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Salomon A vs. Zanlakol | Salomon A vs. Gan Shmuel | Salomon A vs. Carmit | Salomon A vs. Sano Brunos Enterprises |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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