Correlation Between Dupont De and Eternit SA
Can any of the company-specific risk be diversified away by investing in both Dupont De and Eternit SA 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 Eternit SA 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 Eternit SA, you can compare the effects of market volatilities on Dupont De and Eternit SA 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 Eternit SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Eternit SA.
Diversification Opportunities for Dupont De and Eternit SA
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Eternit is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Eternit SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eternit SA 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 Eternit SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eternit SA has no effect on the direction of Dupont De i.e., Dupont De and Eternit SA go up and down completely randomly.
Pair Corralation between Dupont De and Eternit SA
Allowing for the 90-day total investment horizon Dupont De is expected to generate 13.72 times less return on investment than Eternit SA. But when comparing it to its historical volatility, Dupont De Nemours is 2.25 times less risky than Eternit SA. It trades about 0.03 of its potential returns per unit of risk. Eternit SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 514.00 in Eternit SA on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Eternit SA or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dupont De Nemours vs. Eternit SA
Performance |
| Timeline |
| Dupont De Nemours |
| Eternit SA |
Dupont De and Eternit SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Eternit SA
The main advantage of trading using opposite Dupont De and Eternit SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Eternit SA 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 Eternit SA will offset losses from the drop in Eternit SA's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Air Products and | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc |
| Eternit SA vs. BrasilAgro Companhia | Eternit SA vs. Indstrias Romi SA | Eternit SA vs. JHSF Participaes SA | Eternit SA vs. Energisa SA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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