Correlation Between Dupont De and COSMO Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Dupont De and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals 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 COSMO Pharmaceuticals SA, you can compare the effects of market volatilities on Dupont De and COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and COSMO Pharmaceuticals.
Diversification Opportunities for Dupont De and COSMO Pharmaceuticals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and COSMO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and COSMO Pharmaceuticals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO Pharmaceuticals 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 COSMO Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO Pharmaceuticals has no effect on the direction of Dupont De i.e., Dupont De and COSMO Pharmaceuticals go up and down completely randomly.
Pair Corralation between Dupont De and COSMO Pharmaceuticals
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.29 times more return on investment than COSMO Pharmaceuticals. However, Dupont De is 1.29 times more volatile than COSMO Pharmaceuticals SA. It trades about -0.11 of its potential returns per unit of risk. COSMO Pharmaceuticals SA is currently generating about -0.43 per unit of risk. If you would invest 8,954 in Dupont De Nemours on August 28, 2024 and sell it today you would lose (570.00) from holding Dupont De Nemours or give up 6.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. COSMO Pharmaceuticals SA
Performance |
| Timeline |
| Dupont De Nemours |
| COSMO Pharmaceuticals |
Dupont De and COSMO Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and COSMO Pharmaceuticals
The main advantage of trading using opposite Dupont De and COSMO Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, COSMO Pharmaceuticals 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 COSMO Pharmaceuticals will offset losses from the drop in COSMO Pharmaceuticals' 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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