Correlation Between Dupont De and Highland Small-cap
Can any of the company-specific risk be diversified away by investing in both Dupont De and Highland Small-cap 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 Highland Small-cap 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 Highland Small Cap Equity, you can compare the effects of market volatilities on Dupont De and Highland Small-cap 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 Highland Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Highland Small-cap.
Diversification Opportunities for Dupont De and Highland Small-cap
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Highland is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Highland Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Small Cap 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 Highland Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Small Cap has no effect on the direction of Dupont De i.e., Dupont De and Highland Small-cap go up and down completely randomly.
Pair Corralation between Dupont De and Highland Small-cap
Allowing for the 90-day total investment horizon Dupont De is expected to generate 5.1 times less return on investment than Highland Small-cap. In addition to that, Dupont De is 2.27 times more volatile than Highland Small Cap Equity. It trades about 0.03 of its total potential returns per unit of risk. Highland Small Cap Equity is currently generating about 0.33 per unit of volatility. If you would invest 573.00 in Highland Small Cap Equity on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Highland Small Cap Equity or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Highland Small Cap Equity
Performance |
| Timeline |
| Dupont De Nemours |
| Highland Small Cap |
Dupont De and Highland Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Highland Small-cap
The main advantage of trading using opposite Dupont De and Highland Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Highland Small-cap 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 Highland Small-cap will offset losses from the drop in Highland Small-cap's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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