Correlation Between Dupont De and Marks
Can any of the company-specific risk be diversified away by investing in both Dupont De and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on Dupont De and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Marks.
Diversification Opportunities for Dupont De and Marks
Very weak diversification
The 3 months correlation between Dupont and Marks is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Dupont De i.e., Dupont De and Marks go up and down completely randomly.
Pair Corralation between Dupont De and Marks
Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.97 times less return on investment than Marks. But when comparing it to its historical volatility, Dupont De Nemours is 1.46 times less risky than Marks. It trades about 0.03 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 361.00 in Marks and Spencer on September 5, 2024 and sell it today you would earn a total of 108.00 from holding Marks and Spencer or generate 29.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Dupont De Nemours vs. Marks and Spencer
Performance |
| Timeline |
| Dupont De Nemours |
| Marks and Spencer |
Dupont De and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Marks
The main advantage of trading using opposite Dupont De and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Marks vs. CarsalesCom | Marks vs. MAVEN WIRELESS SWEDEN | Marks vs. Entravision Communications | Marks vs. TRADEGATE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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