Correlation Between Dupont De and Erste Group
Can any of the company-specific risk be diversified away by investing in both Dupont De and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on Dupont De and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Erste Group.
Diversification Opportunities for Dupont De and Erste Group
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Erste is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of Dupont De i.e., Dupont De and Erste Group go up and down completely randomly.
Pair Corralation between Dupont De and Erste Group
Allowing for the 90-day total investment horizon Dupont De is expected to generate 6.76 times less return on investment than Erste Group. But when comparing it to its historical volatility, Dupont De Nemours is 1.23 times less risky than Erste Group. It trades about 0.03 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,072 in Erste Group Bank on October 25, 2024 and sell it today you would earn a total of 127.00 from holding Erste Group Bank or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dupont De Nemours vs. Erste Group Bank
Performance |
| Timeline |
| Dupont De Nemours |
| Erste Group Bank |
Dupont De and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Erste Group
The main advantage of trading using opposite Dupont De and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Erste Group vs. DBS Group Holdings | Erste Group vs. Swedbank AB | Erste Group vs. United Overseas Bank | Erste Group vs. Bank Mandiri Persero |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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