Correlation Between Dupont De and Metro AG
Can any of the company-specific risk be diversified away by investing in both Dupont De and Metro AG 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 Metro AG 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 Metro AG, you can compare the effects of market volatilities on Dupont De and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Metro AG.
Diversification Opportunities for Dupont De and Metro AG
Modest diversification
The 3 months correlation between Dupont and Metro is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Dupont De i.e., Dupont De and Metro AG go up and down completely randomly.
Pair Corralation between Dupont De and Metro AG
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.01 times less return on investment than Metro AG. But when comparing it to its historical volatility, Dupont De Nemours is 2.18 times less risky than Metro AG. It trades about 0.04 of its potential returns per unit of risk. Metro AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 492.00 in Metro AG on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Metro AG or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Dupont De Nemours vs. Metro AG
Performance |
| Timeline |
| Dupont De Nemours |
| Metro AG |
Dupont De and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Metro AG
The main advantage of trading using opposite Dupont De and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| Dupont De vs. Griffon | Dupont De vs. Merck Company | Dupont De vs. Brinker International | Dupont De vs. Alcoa Corp |
| Metro AG vs. Superior Plus Corp | Metro AG vs. SIVERS SEMICONDUCTORS AB | Metro AG vs. NorAm Drilling AS | Metro AG vs. BANK HANDLOWY |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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