Correlation Between Dupont De and BGF Euro
Can any of the company-specific risk be diversified away by investing in both Dupont De and BGF Euro 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 BGF Euro 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 BGF Euro Markets, you can compare the effects of market volatilities on Dupont De and BGF Euro 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 BGF Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BGF Euro.
Diversification Opportunities for Dupont De and BGF Euro
Poor diversification
The 3 months correlation between Dupont and BGF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BGF Euro Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Euro Markets 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 BGF Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Euro Markets has no effect on the direction of Dupont De i.e., Dupont De and BGF Euro go up and down completely randomly.
Pair Corralation between Dupont De and BGF Euro
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.48 times more return on investment than BGF Euro. However, Dupont De is 1.48 times more volatile than BGF Euro Markets. It trades about 0.03 of its potential returns per unit of risk. BGF Euro Markets is currently generating about 0.01 per unit of risk. If you would invest 6,814 in Dupont De Nemours on September 3, 2024 and sell it today you would earn a total of 1,558 from holding Dupont De Nemours or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 41.01% |
| Values | Daily Returns |
Dupont De Nemours vs. BGF Euro Markets
Performance |
| Timeline |
| Dupont De Nemours |
| BGF Euro Markets |
Dupont De and BGF Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and BGF Euro
The main advantage of trading using opposite Dupont De and BGF Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BGF Euro 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 BGF Euro will offset losses from the drop in BGF Euro's long position.| Dupont De vs. SPACE | Dupont De vs. Bayview Acquisition Corp | Dupont De vs. T Rowe Price | Dupont De vs. Ampleforth |
| BGF Euro vs. Groupama Entreprises N | BGF Euro vs. Renaissance Europe C | BGF Euro vs. Superior Plus Corp | BGF Euro vs. Origin Agritech |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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