Correlation Between Dupont De and Federal National
Can any of the company-specific risk be diversified away by investing in both Dupont De and Federal National 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 Federal National 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 Federal National Mortgage, you can compare the effects of market volatilities on Dupont De and Federal National 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 Federal National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Federal National.
Diversification Opportunities for Dupont De and Federal National
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Federal is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Federal National Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal National Mortgage 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 Federal National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal National Mortgage has no effect on the direction of Dupont De i.e., Dupont De and Federal National go up and down completely randomly.
Pair Corralation between Dupont De and Federal National
Allowing for the 90-day total investment horizon Dupont De is expected to generate 95.83 times less return on investment than Federal National. But when comparing it to its historical volatility, Dupont De Nemours is 9.38 times less risky than Federal National. It trades about 0.03 of its potential returns per unit of risk. Federal National Mortgage is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Federal National Mortgage on September 1, 2024 and sell it today you would earn a total of 731.00 from holding Federal National Mortgage or generate 112.46% 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. Federal National Mortgage
Performance |
| Timeline |
| Dupont De Nemours |
| Federal National Mortgage |
Dupont De and Federal National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Federal National
The main advantage of trading using opposite Dupont De and Federal National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Federal National 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 Federal National will offset losses from the drop in Federal National's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Federal National vs. Federal National Mortgage | Federal National vs. HUMANA INC | Federal National vs. SCOR PK | Federal National vs. Aquagold International |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |