Correlation Between Dupont De and FS Credit
Can any of the company-specific risk be diversified away by investing in both Dupont De and FS Credit 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 FS Credit 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 FS Credit Opportunities, you can compare the effects of market volatilities on Dupont De and FS Credit 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 FS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and FS Credit.
Diversification Opportunities for Dupont De and FS Credit
Modest diversification
The 3 months correlation between Dupont and FSCO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FS Credit Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Credit Opportunities 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 FS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Credit Opportunities has no effect on the direction of Dupont De i.e., Dupont De and FS Credit go up and down completely randomly.
Pair Corralation between Dupont De and FS Credit
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.25 times less return on investment than FS Credit. In addition to that, Dupont De is 1.26 times more volatile than FS Credit Opportunities. It trades about 0.04 of its total potential returns per unit of risk. FS Credit Opportunities is currently generating about 0.1 per unit of volatility. If you would invest 380.00 in FS Credit Opportunities on September 2, 2024 and sell it today you would earn a total of 300.00 from holding FS Credit Opportunities or generate 78.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. FS Credit Opportunities
Performance |
| Timeline |
| Dupont De Nemours |
| FS Credit Opportunities |
Dupont De and FS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and FS Credit
The main advantage of trading using opposite Dupont De and FS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, FS Credit 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 FS Credit will offset losses from the drop in FS Credit's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| FS Credit vs. MFS Investment Grade | FS Credit vs. Invesco High Income | FS Credit vs. Eaton Vance National | FS Credit vs. Federated Premier Municipal |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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