Correlation Between Dupont De and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Dupont De and Affiliated Managers 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 Affiliated Managers 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 Affiliated Managers Group,, you can compare the effects of market volatilities on Dupont De and Affiliated Managers 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 Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Affiliated Managers.
Diversification Opportunities for Dupont De and Affiliated Managers
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Affiliated is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Dupont De i.e., Dupont De and Affiliated Managers go up and down completely randomly.
Pair Corralation between Dupont De and Affiliated Managers
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.66 times more return on investment than Affiliated Managers. However, Dupont De is 1.66 times more volatile than Affiliated Managers Group,. It trades about -0.05 of its potential returns per unit of risk. Affiliated Managers Group, is currently generating about -0.2 per unit of risk. If you would invest 8,439 in Dupont De Nemours on August 24, 2024 and sell it today you would lose (164.00) from holding Dupont De Nemours or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Affiliated Managers Group,
Performance |
| Timeline |
| Dupont De Nemours |
| Affiliated Managers |
Dupont De and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Affiliated Managers
The main advantage of trading using opposite Dupont De and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| Dupont De vs. Eshallgo Class A | Dupont De vs. Amtech Systems | Dupont De vs. Gold Fields Ltd | Dupont De vs. Aegean Airlines SA |
| Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. DTE Energy | Affiliated Managers vs. United States Cellular |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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