Correlation Between Dupont De and FIRST MUTUAL
Can any of the company-specific risk be diversified away by investing in both Dupont De and FIRST MUTUAL 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 MUTUAL 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 MUTUAL HOLDINGS, you can compare the effects of market volatilities on Dupont De and FIRST MUTUAL 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 MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and FIRST MUTUAL.
Diversification Opportunities for Dupont De and FIRST MUTUAL
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and FIRST is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FIRST MUTUAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST MUTUAL HOLDINGS 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 MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST MUTUAL HOLDINGS has no effect on the direction of Dupont De i.e., Dupont De and FIRST MUTUAL go up and down completely randomly.
Pair Corralation between Dupont De and FIRST MUTUAL
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.51 times less return on investment than FIRST MUTUAL. But when comparing it to its historical volatility, Dupont De Nemours is 6.29 times less risky than FIRST MUTUAL. It trades about 0.08 of its potential returns per unit of risk. FIRST MUTUAL HOLDINGS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 36,000,000 in FIRST MUTUAL HOLDINGS on August 27, 2024 and sell it today you would lose (35,955,005) from holding FIRST MUTUAL HOLDINGS or give up 99.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Dupont De Nemours vs. FIRST MUTUAL HOLDINGS
Performance |
| Timeline |
| Dupont De Nemours |
| FIRST MUTUAL HOLDINGS |
Dupont De and FIRST MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and FIRST MUTUAL
The main advantage of trading using opposite Dupont De and FIRST MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, FIRST MUTUAL 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 MUTUAL will offset losses from the drop in FIRST MUTUAL's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| FIRST MUTUAL vs. FIRST MUTUAL PROPERTIES | FIRST MUTUAL vs. STAR AFRICA PORATION | FIRST MUTUAL vs. CAFCA LIMITED | FIRST MUTUAL vs. AFRICAN DISTILLERS LIMITED |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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