Correlation Between Dupont De and IQ Merger
Can any of the company-specific risk be diversified away by investing in both Dupont De and IQ Merger 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 IQ Merger 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 IQ Merger Arbitrage, you can compare the effects of market volatilities on Dupont De and IQ Merger 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 IQ Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and IQ Merger.
Diversification Opportunities for Dupont De and IQ Merger
Very weak diversification
The 3 months correlation between Dupont and MNA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and IQ Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Merger Arbitrage 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 IQ Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Merger Arbitrage has no effect on the direction of Dupont De i.e., Dupont De and IQ Merger go up and down completely randomly.
Pair Corralation between Dupont De and IQ Merger
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 5.26 times more return on investment than IQ Merger. However, Dupont De is 5.26 times more volatile than IQ Merger Arbitrage. It trades about 0.03 of its potential returns per unit of risk. IQ Merger Arbitrage is currently generating about 0.03 per unit of risk. If you would invest 7,000 in Dupont De Nemours on August 28, 2024 and sell it today you would earn a total of 1,443 from holding Dupont De Nemours or generate 20.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. IQ Merger Arbitrage
Performance |
| Timeline |
| Dupont De Nemours |
| IQ Merger Arbitrage |
Dupont De and IQ Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and IQ Merger
The main advantage of trading using opposite Dupont De and IQ Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, IQ Merger 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 IQ Merger will offset losses from the drop in IQ Merger's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| IQ Merger vs. IQ Hedge Multi Strategy | IQ Merger vs. ProShares Merger ETF | IQ Merger vs. AGFiQ Market Neutral |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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