Correlation Between Dupont De and BFIT
Can any of the company-specific risk be diversified away by investing in both Dupont De and BFIT 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 BFIT 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 BFIT, you can compare the effects of market volatilities on Dupont De and BFIT 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 BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BFIT.
Diversification Opportunities for Dupont De and BFIT
Pay attention - limited upside
The 3 months correlation between Dupont and BFIT is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT 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 BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Dupont De i.e., Dupont De and BFIT go up and down completely randomly.
Pair Corralation between Dupont De and BFIT
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.36 times more return on investment than BFIT. However, Dupont De is 1.36 times more volatile than BFIT. It trades about 0.03 of its potential returns per unit of risk. BFIT is currently generating about 0.04 per unit of risk. If you would invest 6,912 in Dupont De Nemours on August 23, 2024 and sell it today you would earn a total of 1,363 from holding Dupont De Nemours or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 32.26% |
| Values | Daily Returns |
Dupont De Nemours vs. BFIT
Performance |
| Timeline |
| Dupont De Nemours |
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dupont De and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BFIT
The main advantage of trading using opposite Dupont De and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. LyondellBasell Industries NV | Dupont De vs. Air Products and |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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