Correlation Between Dupont De and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both Dupont De and AG Mortgage 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 AG Mortgage 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 AG Mortgage Investment, you can compare the effects of market volatilities on Dupont De and AG Mortgage 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 AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AG Mortgage.
Diversification Opportunities for Dupont De and AG Mortgage
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and MITT-PB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment 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 AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Dupont De i.e., Dupont De and AG Mortgage go up and down completely randomly.
Pair Corralation between Dupont De and AG Mortgage
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 2.2 times more return on investment than AG Mortgage. However, Dupont De is 2.2 times more volatile than AG Mortgage Investment. It trades about -0.01 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about -0.05 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 27, 2024 and sell it today you would lose (59.00) from holding Dupont De Nemours or give up 0.7% 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. AG Mortgage Investment
Performance |
| Timeline |
| Dupont De Nemours |
| AG Mortgage Investment |
Dupont De and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AG Mortgage
The main advantage of trading using opposite Dupont De and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| AG Mortgage vs. New York Mortgage | AG Mortgage vs. New York Mortgage | AG Mortgage vs. Two Harbors Investment | AG Mortgage vs. Two Harbors Investment |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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