Correlation Between Dupont De and BM Technologies
Can any of the company-specific risk be diversified away by investing in both Dupont De and BM Technologies 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 BM Technologies 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 BM Technologies WT, you can compare the effects of market volatilities on Dupont De and BM Technologies 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 BM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BM Technologies.
Diversification Opportunities for Dupont De and BM Technologies
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and BMTX-WT is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BM Technologies WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BM Technologies WT 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 BM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BM Technologies WT has no effect on the direction of Dupont De i.e., Dupont De and BM Technologies go up and down completely randomly.
Pair Corralation between Dupont De and BM Technologies
Allowing for the 90-day total investment horizon Dupont De is expected to generate 81.04 times less return on investment than BM Technologies. But when comparing it to its historical volatility, Dupont De Nemours is 36.02 times less risky than BM Technologies. It trades about 0.03 of its potential returns per unit of risk. BM Technologies WT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 42.00 in BM Technologies WT on August 27, 2024 and sell it today you would earn a total of 4.00 from holding BM Technologies WT or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.25% |
| Values | Daily Returns |
Dupont De Nemours vs. BM Technologies WT
Performance |
| Timeline |
| Dupont De Nemours |
| BM Technologies WT |
Dupont De and BM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BM Technologies
The main advantage of trading using opposite Dupont De and BM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BM Technologies 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 BM Technologies will offset losses from the drop in BM Technologies' long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| BM Technologies vs. Copa Holdings SA | BM Technologies vs. United Airlines Holdings | BM Technologies vs. Delta Air Lines | BM Technologies vs. SkyWest |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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