Correlation Between Dupont De and EPR Properties
Can any of the company-specific risk be diversified away by investing in both Dupont De and EPR Properties 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 EPR Properties 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 EPR Properties, you can compare the effects of market volatilities on Dupont De and EPR Properties 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 EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and EPR Properties.
Diversification Opportunities for Dupont De and EPR Properties
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and EPR is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Dupont De i.e., Dupont De and EPR Properties go up and down completely randomly.
Pair Corralation between Dupont De and EPR Properties
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.55 times more return on investment than EPR Properties. However, Dupont De is 1.55 times more volatile than EPR Properties. It trades about 0.04 of its potential returns per unit of risk. EPR Properties is currently generating about 0.05 per unit of risk. If you would invest 6,874 in Dupont De Nemours on August 31, 2024 and sell it today you would earn a total of 1,485 from holding Dupont De Nemours or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. EPR Properties
Performance |
| Timeline |
| Dupont De Nemours |
| EPR Properties |
Dupont De and EPR Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and EPR Properties
The main advantage of trading using opposite Dupont De and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, EPR Properties 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 EPR Properties will offset losses from the drop in EPR Properties' long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc | Dupont De vs. Sherwin Williams Co |
| EPR Properties vs. EPR Properties Series | EPR Properties vs. EPR Properties | EPR Properties vs. Lexington Realty Trust | EPR Properties vs. Aquagold International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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