Correlation Between Dupont De and Golden Agri-Resources
Can any of the company-specific risk be diversified away by investing in both Dupont De and Golden Agri-Resources 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 Golden Agri-Resources 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 Golden Agri Resources, you can compare the effects of market volatilities on Dupont De and Golden Agri-Resources 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 Golden Agri-Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Golden Agri-Resources.
Diversification Opportunities for Dupont De and Golden Agri-Resources
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Golden is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources 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 Golden Agri-Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Dupont De i.e., Dupont De and Golden Agri-Resources go up and down completely randomly.
Pair Corralation between Dupont De and Golden Agri-Resources
Allowing for the 90-day total investment horizon Dupont De is expected to generate 12.35 times less return on investment than Golden Agri-Resources. But when comparing it to its historical volatility, Dupont De Nemours is 4.15 times less risky than Golden Agri-Resources. It trades about 0.01 of its potential returns per unit of risk. Golden Agri Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Golden Agri Resources on November 5, 2024 and sell it today you would earn a total of 4.00 from holding Golden Agri Resources or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.78% |
| Values | Daily Returns |
Dupont De Nemours vs. Golden Agri Resources
Performance |
| Timeline |
| Dupont De Nemours |
| Golden Agri Resources |
Dupont De and Golden Agri-Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Golden Agri-Resources
The main advantage of trading using opposite Dupont De and Golden Agri-Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Golden Agri-Resources 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 Golden Agri-Resources will offset losses from the drop in Golden Agri-Resources' long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Golden Agri-Resources vs. Wilmar International | Golden Agri-Resources vs. SLC Agricola SA | Golden Agri-Resources vs. Brasilagro Adr | Golden Agri-Resources vs. Alico Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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