Correlation Between Dupont De and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Dupont De and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway, you can compare the effects of market volatilities on Dupont De and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Jiangsu Expressway.
Diversification Opportunities for Dupont De and Jiangsu Expressway
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Jiangsu is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Dupont De i.e., Dupont De and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Dupont De and Jiangsu Expressway
Allowing for the 90-day total investment horizon Dupont De is expected to generate 11.58 times less return on investment than Jiangsu Expressway. But when comparing it to its historical volatility, Dupont De Nemours is 4.89 times less risky than Jiangsu Expressway. It trades about 0.03 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Jiangsu Expressway on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Jiangsu Expressway or generate 462.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.35% |
| Values | Daily Returns |
Dupont De Nemours vs. Jiangsu Expressway
Performance |
| Timeline |
| Dupont De Nemours |
| Jiangsu Expressway |
Dupont De and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Jiangsu Expressway
The main advantage of trading using opposite Dupont De and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc | Dupont De vs. Sherwin Williams Co |
| Jiangsu Expressway vs. Austevoll Seafood ASA | Jiangsu Expressway vs. Lifeway Foods | Jiangsu Expressway vs. INFORMATION SVC GRP | Jiangsu Expressway vs. NISSIN FOODS HLDGS |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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