Correlation Between Dupont De and Catalyst Hedged
Can any of the company-specific risk be diversified away by investing in both Dupont De and Catalyst Hedged 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 Catalyst Hedged 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 Catalyst Hedged Modity, you can compare the effects of market volatilities on Dupont De and Catalyst Hedged 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 Catalyst Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Catalyst Hedged.
Diversification Opportunities for Dupont De and Catalyst Hedged
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Catalyst is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity 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 Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Dupont De i.e., Dupont De and Catalyst Hedged go up and down completely randomly.
Pair Corralation between Dupont De and Catalyst Hedged
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.75 times more return on investment than Catalyst Hedged. However, Dupont De is 1.75 times more volatile than Catalyst Hedged Modity. It trades about 0.01 of its potential returns per unit of risk. Catalyst Hedged Modity is currently generating about -0.06 per unit of risk. If you would invest 8,330 in Dupont De Nemours on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Dupont De Nemours or generate 0.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Catalyst Hedged Modity
Performance |
| Timeline |
| Dupont De Nemours |
| Catalyst Hedged Modity |
Dupont De and Catalyst Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Catalyst Hedged
The main advantage of trading using opposite Dupont De and Catalyst Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Catalyst Hedged 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 Catalyst Hedged will offset losses from the drop in Catalyst Hedged's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Catalyst Hedged vs. Pace High Yield | Catalyst Hedged vs. Pace High Yield | Catalyst Hedged vs. Morningstar Aggressive Growth | Catalyst Hedged vs. Artisan High Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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