Correlation Between Dupont De and BASF SE
Can any of the company-specific risk be diversified away by investing in both Dupont De and BASF SE 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 BASF SE 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 BASF SE, you can compare the effects of market volatilities on Dupont De and BASF SE 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 BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BASF SE.
Diversification Opportunities for Dupont De and BASF SE
Poor diversification
The 3 months correlation between Dupont and BASF is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of Dupont De i.e., Dupont De and BASF SE go up and down completely randomly.
Pair Corralation between Dupont De and BASF SE
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.62 times more return on investment than BASF SE. However, Dupont De Nemours is 1.61 times less risky than BASF SE. It trades about 0.03 of its potential returns per unit of risk. BASF SE is currently generating about -0.1 per unit of risk. If you would invest 8,299 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Dupont De Nemours or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dupont De Nemours vs. BASF SE
Performance |
| Timeline |
| Dupont De Nemours |
| BASF SE |
Dupont De and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BASF SE
The main advantage of trading using opposite Dupont De and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| BASF SE vs. ARISTOCRAT LEISURE | BASF SE vs. PLAY2CHILL SA ZY | BASF SE vs. Consolidated Communications Holdings | BASF SE vs. PLAYSTUDIOS A DL 0001 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |