Correlation Between Dupont De and Compagnie
Can any of the company-specific risk be diversified away by investing in both Dupont De and Compagnie 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 Compagnie 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 Compagnie du Bois, you can compare the effects of market volatilities on Dupont De and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Compagnie.
Diversification Opportunities for Dupont De and Compagnie
Good diversification
The 3 months correlation between Dupont and Compagnie is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Compagnie du Bois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie du Bois 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie du Bois has no effect on the direction of Dupont De i.e., Dupont De and Compagnie go up and down completely randomly.
Pair Corralation between Dupont De and Compagnie
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.14 times more return on investment than Compagnie. However, Dupont De is 1.14 times more volatile than Compagnie du Bois. It trades about 0.04 of its potential returns per unit of risk. Compagnie du Bois is currently generating about -0.04 per unit of risk. If you would invest 6,733 in Dupont De Nemours on August 28, 2024 and sell it today you would earn a total of 1,651 from holding Dupont De Nemours or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Dupont De Nemours vs. Compagnie du Bois
Performance |
| Timeline |
| Dupont De Nemours |
| Compagnie du Bois |
Dupont De and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Compagnie
The main advantage of trading using opposite Dupont De and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Compagnie vs. Groep Brussel Lambert | Compagnie vs. Sofina Socit Anonyme | Compagnie vs. Ackermans Van Haaren | Compagnie vs. KBC Ancora |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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