Correlation Between Dupont De and BJC Heavy
Can any of the company-specific risk be diversified away by investing in both Dupont De and BJC Heavy 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 BJC Heavy 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 BJC Heavy Industries, you can compare the effects of market volatilities on Dupont De and BJC Heavy 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 BJC Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BJC Heavy.
Diversification Opportunities for Dupont De and BJC Heavy
Poor diversification
The 3 months correlation between Dupont and BJC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BJC Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJC Heavy Industries 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 BJC Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJC Heavy Industries has no effect on the direction of Dupont De i.e., Dupont De and BJC Heavy go up and down completely randomly.
Pair Corralation between Dupont De and BJC Heavy
Allowing for the 90-day total investment horizon Dupont De is expected to generate 50.61 times less return on investment than BJC Heavy. But when comparing it to its historical volatility, Dupont De Nemours is 50.07 times less risky than BJC Heavy. It trades about 0.06 of its potential returns per unit of risk. BJC Heavy Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 109.00 in BJC Heavy Industries on November 3, 2024 and sell it today you would lose (1.00) from holding BJC Heavy Industries or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Dupont De Nemours vs. BJC Heavy Industries
Performance |
| Timeline |
| Dupont De Nemours |
| BJC Heavy Industries |
Dupont De and BJC Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BJC Heavy
The main advantage of trading using opposite Dupont De and BJC Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BJC Heavy 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 BJC Heavy will offset losses from the drop in BJC Heavy's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| BJC Heavy vs. CH Karnchang Public | BJC Heavy vs. Asia Aviation Public | BJC Heavy vs. AAPICO Hitech Public | BJC Heavy vs. GFPT Public |
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 Stocks Directory module to find actively traded stocks across global markets.
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