Correlation Between Dupont De and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Dupont De and Falcon Oil 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 Falcon Oil 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 Falcon Oil Gas, you can compare the effects of market volatilities on Dupont De and Falcon Oil 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 Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Falcon Oil.
Diversification Opportunities for Dupont De and Falcon Oil
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Falcon is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas 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 Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of Dupont De i.e., Dupont De and Falcon Oil go up and down completely randomly.
Pair Corralation between Dupont De and Falcon Oil
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Falcon Oil. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 5.09 times less risky than Falcon Oil. The stock trades about -0.19 of its potential returns per unit of risk. The Falcon Oil Gas is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 425.00 in Falcon Oil Gas on October 26, 2024 and sell it today you would earn a total of 325.00 from holding Falcon Oil Gas or generate 76.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
Dupont De Nemours vs. Falcon Oil Gas
Performance |
| Timeline |
| Dupont De Nemours |
| Falcon Oil Gas |
Dupont De and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Falcon Oil
The main advantage of trading using opposite Dupont De and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Falcon Oil vs. Take Two Interactive Software | Falcon Oil vs. Tatton Asset Management | Falcon Oil vs. Coor Service Management | Falcon Oil vs. Accesso Technology Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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