Correlation Between Dupont De and Essentra Plc
Can any of the company-specific risk be diversified away by investing in both Dupont De and Essentra Plc 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 Essentra Plc 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 Essentra Plc, you can compare the effects of market volatilities on Dupont De and Essentra Plc 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 Essentra Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Essentra Plc.
Diversification Opportunities for Dupont De and Essentra Plc
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Essentra is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Essentra Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essentra Plc 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 Essentra Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essentra Plc has no effect on the direction of Dupont De i.e., Dupont De and Essentra Plc go up and down completely randomly.
Pair Corralation between Dupont De and Essentra Plc
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.16 times less return on investment than Essentra Plc. But when comparing it to its historical volatility, Dupont De Nemours is 1.42 times less risky than Essentra Plc. It trades about 0.05 of its potential returns per unit of risk. Essentra Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 196.00 in Essentra Plc on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Essentra Plc or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Essentra Plc
Performance |
| Timeline |
| Dupont De Nemours |
| Essentra Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dupont De and Essentra Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Essentra Plc
The main advantage of trading using opposite Dupont De and Essentra Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Essentra Plc 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 Essentra Plc will offset losses from the drop in Essentra Plc's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Essentra Plc vs. LyondellBasell Industries NV | Essentra Plc vs. International Flavors Fragrances | Essentra Plc vs. Cabot | Essentra Plc vs. Westlake Chemical |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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