Correlation Between Dupont De and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Dupont De and Gildan Activewear 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 Gildan Activewear 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 Gildan Activewear, you can compare the effects of market volatilities on Dupont De and Gildan Activewear 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 Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Gildan Activewear.
Diversification Opportunities for Dupont De and Gildan Activewear
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and Gildan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Dupont De i.e., Dupont De and Gildan Activewear go up and down completely randomly.
Pair Corralation between Dupont De and Gildan Activewear
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.83 times less return on investment than Gildan Activewear. But when comparing it to its historical volatility, Dupont De Nemours is 1.11 times less risky than Gildan Activewear. It trades about 0.03 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,730 in Gildan Activewear on August 28, 2024 and sell it today you would earn a total of 3,260 from holding Gildan Activewear or generate 87.4% 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. Gildan Activewear
Performance |
| Timeline |
| Dupont De Nemours |
| Gildan Activewear |
Dupont De and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Gildan Activewear
The main advantage of trading using opposite Dupont De and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |