Correlation Between Dupont De and First Citizens
Can any of the company-specific risk be diversified away by investing in both Dupont De and First Citizens 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 First Citizens 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 First Citizens BancShares, you can compare the effects of market volatilities on Dupont De and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and First Citizens.
Diversification Opportunities for Dupont De and First Citizens
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and First is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Dupont De i.e., Dupont De and First Citizens go up and down completely randomly.
Pair Corralation between Dupont De and First Citizens
Allowing for the 90-day total investment horizon Dupont De is expected to generate 18.85 times less return on investment than First Citizens. But when comparing it to its historical volatility, Dupont De Nemours is 2.57 times less risky than First Citizens. It trades about 0.02 of its potential returns per unit of risk. First Citizens BancShares is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 171,100 in First Citizens BancShares on August 30, 2024 and sell it today you would earn a total of 24,900 from holding First Citizens BancShares or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. First Citizens BancShares
Performance |
| Timeline |
| Dupont De Nemours |
| First Citizens BancShares |
Dupont De and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and First Citizens
The main advantage of trading using opposite Dupont De and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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