Correlation Between Dupont De and Carters
Can any of the company-specific risk be diversified away by investing in both Dupont De and Carters 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 Carters 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 Carters, you can compare the effects of market volatilities on Dupont De and Carters 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 Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Carters.
Diversification Opportunities for Dupont De and Carters
Significant diversification
The 3 months correlation between Dupont and Carters is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Dupont De i.e., Dupont De and Carters go up and down completely randomly.
Pair Corralation between Dupont De and Carters
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.82 times more return on investment than Carters. However, Dupont De Nemours is 1.22 times less risky than Carters. It trades about 0.02 of its potential returns per unit of risk. Carters is currently generating about -0.05 per unit of risk. If you would invest 7,231 in Dupont De Nemours on November 9, 2024 and sell it today you would earn a total of 517.00 from holding Dupont De Nemours or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Carters
Performance |
| Timeline |
| Dupont De Nemours |
| Carters |
Dupont De and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Carters
The main advantage of trading using opposite Dupont De and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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