Correlation Between Dupont De and FAT Brands
Can any of the company-specific risk be diversified away by investing in both Dupont De and FAT Brands 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 FAT Brands 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 FAT Brands, you can compare the effects of market volatilities on Dupont De and FAT Brands 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 FAT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and FAT Brands.
Diversification Opportunities for Dupont De and FAT Brands
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and FAT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FAT Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAT Brands 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 FAT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAT Brands has no effect on the direction of Dupont De i.e., Dupont De and FAT Brands go up and down completely randomly.
Pair Corralation between Dupont De and FAT Brands
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.51 times more return on investment than FAT Brands. However, Dupont De Nemours is 1.95 times less risky than FAT Brands. It trades about 0.03 of its potential returns per unit of risk. FAT Brands is currently generating about 0.01 per unit of risk. If you would invest 6,656 in Dupont De Nemours on December 5, 2024 and sell it today you would earn a total of 1,168 from holding Dupont De Nemours or generate 17.54% 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. FAT Brands
Performance |
| Timeline |
| Dupont De Nemours |
| FAT Brands |
Dupont De and FAT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and FAT Brands
The main advantage of trading using opposite Dupont De and FAT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, FAT Brands 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 FAT Brands will offset losses from the drop in FAT Brands' long position.| Dupont De vs. Eastman Chemical | ||
| Dupont De vs. Olin Corporation | ||
| Dupont De vs. Cabot | ||
| Dupont De vs. Kronos Worldwide |
| FAT Brands vs. FAT Brands | ||
| FAT Brands vs. Cannae Holdings | ||
| FAT Brands vs. Nathans Famous | ||
| FAT Brands vs. Dine Brands Global |
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.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |