Correlation Between Dupont De and Bumi Resources
Can any of the company-specific risk be diversified away by investing in both Dupont De and Bumi Resources 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 Bumi Resources 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 Bumi Resources Minerals, you can compare the effects of market volatilities on Dupont De and Bumi Resources 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 Bumi Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Bumi Resources.
Diversification Opportunities for Dupont De and Bumi Resources
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and Bumi is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Bumi Resources Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Resources Minerals 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 Bumi Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Resources Minerals has no effect on the direction of Dupont De i.e., Dupont De and Bumi Resources go up and down completely randomly.
Pair Corralation between Dupont De and Bumi Resources
Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.73 times less return on investment than Bumi Resources. But when comparing it to its historical volatility, Dupont De Nemours is 2.18 times less risky than Bumi Resources. It trades about 0.05 of its potential returns per unit of risk. Bumi Resources Minerals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,400 in Bumi Resources Minerals on August 24, 2024 and sell it today you would earn a total of 24,200 from holding Bumi Resources Minerals or generate 118.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.4% |
| Values | Daily Returns |
Dupont De Nemours vs. Bumi Resources Minerals
Performance |
| Timeline |
| Dupont De Nemours |
| Bumi Resources Minerals |
Dupont De and Bumi Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Bumi Resources
The main advantage of trading using opposite Dupont De and Bumi Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Bumi Resources 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 Bumi Resources will offset losses from the drop in Bumi Resources' long position.| Dupont De vs. Eshallgo Class A | Dupont De vs. Amtech Systems | Dupont De vs. Gold Fields Ltd | Dupont De vs. Aegean Airlines SA |
| Bumi Resources vs. Kedaung Indah Can | Bumi Resources vs. Langgeng Makmur Industri | Bumi Resources vs. Kabelindo Murni Tbk | Bumi Resources vs. Mustika Ratu Tbk |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |