Correlation Between Dupont De and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Dupont De and Bayu Buana 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 Bayu Buana 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 Bayu Buana Tbk, you can compare the effects of market volatilities on Dupont De and Bayu Buana 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 Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Bayu Buana.
Diversification Opportunities for Dupont De and Bayu Buana
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Bayu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk 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 Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Dupont De i.e., Dupont De and Bayu Buana go up and down completely randomly.
Pair Corralation between Dupont De and Bayu Buana
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.76 times more return on investment than Bayu Buana. However, Dupont De Nemours is 1.31 times less risky than Bayu Buana. It trades about 0.09 of its potential returns per unit of risk. Bayu Buana Tbk is currently generating about 0.02 per unit of risk. If you would invest 6,836 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 1,523 from holding Dupont De Nemours or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.62% |
| Values | Daily Returns |
Dupont De Nemours vs. Bayu Buana Tbk
Performance |
| Timeline |
| Dupont De Nemours |
| Bayu Buana Tbk |
Dupont De and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Bayu Buana
The main advantage of trading using opposite Dupont De and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Bayu Buana 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Bayu Buana vs. Japfa Comfeed Indonesia | Bayu Buana vs. Charoen Pokphand Indonesia | Bayu Buana vs. Erajaya Swasembada Tbk | Bayu Buana vs. Indofood Cbp Sukses |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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