Correlation Between Dupont De and CompoSecure
Can any of the company-specific risk be diversified away by investing in both Dupont De and CompoSecure 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 CompoSecure 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 CompoSecure, you can compare the effects of market volatilities on Dupont De and CompoSecure 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 CompoSecure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and CompoSecure.
Diversification Opportunities for Dupont De and CompoSecure
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and CompoSecure is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and CompoSecure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompoSecure 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 CompoSecure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompoSecure has no effect on the direction of Dupont De i.e., Dupont De and CompoSecure go up and down completely randomly.
Pair Corralation between Dupont De and CompoSecure
Allowing for the 90-day total investment horizon Dupont De is expected to generate 139.86 times less return on investment than CompoSecure. But when comparing it to its historical volatility, Dupont De Nemours is 65.07 times less risky than CompoSecure. It trades about 0.05 of its potential returns per unit of risk. CompoSecure is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 106.00 in CompoSecure on August 28, 2024 and sell it today you would earn a total of 379.00 from holding CompoSecure or generate 357.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.59% |
| Values | Daily Returns |
Dupont De Nemours vs. CompoSecure
Performance |
| Timeline |
| Dupont De Nemours |
| CompoSecure |
Dupont De and CompoSecure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and CompoSecure
The main advantage of trading using opposite Dupont De and CompoSecure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, CompoSecure 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 CompoSecure will offset losses from the drop in CompoSecure'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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