Correlation Between Dupont De and BankUnited
Can any of the company-specific risk be diversified away by investing in both Dupont De and BankUnited 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 BankUnited 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 BankUnited, you can compare the effects of market volatilities on Dupont De and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BankUnited.
Diversification Opportunities for Dupont De and BankUnited
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and BankUnited is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Dupont De i.e., Dupont De and BankUnited go up and down completely randomly.
Pair Corralation between Dupont De and BankUnited
Allowing for the 90-day total investment horizon Dupont De is expected to generate 28.82 times less return on investment than BankUnited. But when comparing it to its historical volatility, Dupont De Nemours is 2.62 times less risky than BankUnited. It trades about 0.02 of its potential returns per unit of risk. BankUnited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,240 in BankUnited on August 30, 2024 and sell it today you would earn a total of 740.00 from holding BankUnited or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dupont De Nemours vs. BankUnited
Performance |
| Timeline |
| Dupont De Nemours |
| BankUnited |
Dupont De and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BankUnited
The main advantage of trading using opposite Dupont De and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| BankUnited vs. Fifth Third Bancorp | BankUnited vs. Huntington Bancshares Incorporated | BankUnited vs. Superior Plus Corp | BankUnited vs. NMI Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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