Correlation Between Dupont De and Citizens Holding
Can any of the company-specific risk be diversified away by investing in both Dupont De and Citizens Holding 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 Citizens Holding 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 Citizens Holding, you can compare the effects of market volatilities on Dupont De and Citizens Holding 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 Citizens Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Citizens Holding.
Diversification Opportunities for Dupont De and Citizens Holding
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Citizens is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Citizens Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Holding 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 Citizens Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Holding has no effect on the direction of Dupont De i.e., Dupont De and Citizens Holding go up and down completely randomly.
Pair Corralation between Dupont De and Citizens Holding
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.68 times more return on investment than Citizens Holding. However, Dupont De Nemours is 1.47 times less risky than Citizens Holding. It trades about 0.03 of its potential returns per unit of risk. Citizens Holding is currently generating about -0.02 per unit of risk. If you would invest 6,759 in Dupont De Nemours on August 27, 2024 and sell it today you would earn a total of 1,573 from holding Dupont De Nemours or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
Dupont De Nemours vs. Citizens Holding
Performance |
| Timeline |
| Dupont De Nemours |
| Citizens Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dupont De and Citizens Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Citizens Holding
The main advantage of trading using opposite Dupont De and Citizens Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Citizens Holding 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 Citizens Holding will offset losses from the drop in Citizens Holding's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Citizens Holding vs. Home Federal Bancorp | Citizens Holding vs. Lake Shore Bancorp | Citizens Holding vs. Community West Bancshares | Citizens Holding vs. Magyar Bancorp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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