Correlation Between Dupont De and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both Dupont De and Customers Bancorp 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 Customers Bancorp 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 Customers Bancorp, you can compare the effects of market volatilities on Dupont De and Customers Bancorp 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 Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Customers Bancorp.
Diversification Opportunities for Dupont De and Customers Bancorp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and Customers is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp 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 Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Dupont De i.e., Dupont De and Customers Bancorp go up and down completely randomly.
Pair Corralation between Dupont De and Customers Bancorp
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.55 times less return on investment than Customers Bancorp. But when comparing it to its historical volatility, Dupont De Nemours is 1.21 times less risky than Customers Bancorp. It trades about 0.03 of its potential returns per unit of risk. Customers Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,473 in Customers Bancorp on November 27, 2024 and sell it today you would earn a total of 528.00 from holding Customers Bancorp or generate 35.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Customers Bancorp
Performance |
| Timeline |
| Dupont De Nemours |
| Customers Bancorp |
Dupont De and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Customers Bancorp
The main advantage of trading using opposite Dupont De and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Customers Bancorp 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Customers Bancorp vs. CMS Energy Corp | Customers Bancorp vs. CMS Energy Corp | Customers Bancorp vs. American Financial Group | Customers Bancorp vs. Eagle Point Credit |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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