Correlation Between Dupont De and CAG Group
Can any of the company-specific risk be diversified away by investing in both Dupont De and CAG Group 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 CAG Group 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 CAG Group AB, you can compare the effects of market volatilities on Dupont De and CAG Group 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 CAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and CAG Group.
Diversification Opportunities for Dupont De and CAG Group
Very good diversification
The 3 months correlation between Dupont and CAG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and CAG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAG Group AB 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 CAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAG Group AB has no effect on the direction of Dupont De i.e., Dupont De and CAG Group go up and down completely randomly.
Pair Corralation between Dupont De and CAG Group
Allowing for the 90-day total investment horizon Dupont De is expected to generate 3.54 times less return on investment than CAG Group. In addition to that, Dupont De is 1.23 times more volatile than CAG Group AB. It trades about 0.01 of its total potential returns per unit of risk. CAG Group AB is currently generating about 0.02 per unit of volatility. If you would invest 11,050 in CAG Group AB on August 29, 2024 and sell it today you would earn a total of 50.00 from holding CAG Group AB or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. CAG Group AB
Performance |
| Timeline |
| Dupont De Nemours |
| CAG Group AB |
Dupont De and CAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and CAG Group
The main advantage of trading using opposite Dupont De and CAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, CAG Group 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 CAG Group will offset losses from the drop in CAG Group's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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