Correlation Between Dupont De and HK Electric
Can any of the company-specific risk be diversified away by investing in both Dupont De and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on Dupont De and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and HK Electric.
Diversification Opportunities for Dupont De and HK Electric
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and HKT is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Dupont De i.e., Dupont De and HK Electric go up and down completely randomly.
Pair Corralation between Dupont De and HK Electric
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.85 times more return on investment than HK Electric. However, Dupont De is 1.85 times more volatile than HK Electric Investments. It trades about 0.01 of its potential returns per unit of risk. HK Electric Investments is currently generating about 0.0 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 28, 2024 and sell it today you would lose (7.00) from holding Dupont De Nemours or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. HK Electric Investments
Performance |
| Timeline |
| Dupont De Nemours |
| HK Electric Investments |
Dupont De and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and HK Electric
The main advantage of trading using opposite Dupont De and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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