Correlation Between Dupont De and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both Dupont De and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on Dupont De and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and KGHM Polska.
Diversification Opportunities for Dupont De and KGHM Polska
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and KGHM is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of Dupont De i.e., Dupont De and KGHM Polska go up and down completely randomly.
Pair Corralation between Dupont De and KGHM Polska
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.57 times more return on investment than KGHM Polska. However, Dupont De Nemours is 1.75 times less risky than KGHM Polska. It trades about -0.07 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.36 per unit of risk. If you would invest 8,489 in Dupont De Nemours on August 23, 2024 and sell it today you would lose (214.00) from holding Dupont De Nemours or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Dupont De Nemours vs. KGHM Polska Miedz
Performance |
| Timeline |
| Dupont De Nemours |
| KGHM Polska Miedz |
Dupont De and KGHM Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and KGHM Polska
The main advantage of trading using opposite Dupont De and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. LyondellBasell Industries NV | Dupont De vs. Air Products and |
| KGHM Polska vs. Datawalk SA | KGHM Polska vs. Noble Financials SA | KGHM Polska vs. Quantum Software SA | KGHM Polska vs. Immobile |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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