Correlation Between Dupont De and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Dupont De and Matthews Asia 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 Matthews Asia 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 Matthews Asia Dividend, you can compare the effects of market volatilities on Dupont De and Matthews Asia 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 Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Matthews Asia.
Diversification Opportunities for Dupont De and Matthews Asia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dupont and Matthews is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Matthews Asia Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Dividend 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 Matthews Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Dividend has no effect on the direction of Dupont De i.e., Dupont De and Matthews Asia go up and down completely randomly.
Pair Corralation between Dupont De and Matthews Asia
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Matthews Asia. In addition to that, Dupont De is 1.35 times more volatile than Matthews Asia Dividend. It trades about -0.09 of its total potential returns per unit of risk. Matthews Asia Dividend is currently generating about -0.04 per unit of volatility. If you would invest 1,462 in Matthews Asia Dividend on September 18, 2024 and sell it today you would lose (8.00) from holding Matthews Asia Dividend or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Matthews Asia Dividend
Performance |
| Timeline |
| Dupont De Nemours |
| Matthews Asia Dividend |
Dupont De and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Matthews Asia
The main advantage of trading using opposite Dupont De and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Matthews Asia 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 Matthews Asia will offset losses from the drop in Matthews Asia's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Matthews Asia vs. Matthews Asian Growth | Matthews Asia vs. Matthews Pacific Tiger | Matthews Asia vs. Matthews Asia Growth | Matthews Asia vs. Matthews India Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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