Correlation Between Dupont De and Old Second
Can any of the company-specific risk be diversified away by investing in both Dupont De and Old Second 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 Old Second 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 Old Second Bancorp, you can compare the effects of market volatilities on Dupont De and Old Second 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 Old Second. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Old Second.
Diversification Opportunities for Dupont De and Old Second
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Old is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Old Second Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Second Bancorp 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 Old Second. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Second Bancorp has no effect on the direction of Dupont De i.e., Dupont De and Old Second go up and down completely randomly.
Pair Corralation between Dupont De and Old Second
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.07 times less return on investment than Old Second. But when comparing it to its historical volatility, Dupont De Nemours is 1.26 times less risky than Old Second. It trades about 0.11 of its potential returns per unit of risk. Old Second Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,345 in Old Second Bancorp on August 29, 2024 and sell it today you would earn a total of 524.00 from holding Old Second Bancorp or generate 38.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Old Second Bancorp
Performance |
| Timeline |
| Dupont De Nemours |
| Old Second Bancorp |
Dupont De and Old Second Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Old Second
The main advantage of trading using opposite Dupont De and Old Second positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Old Second 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 Old Second will offset losses from the drop in Old Second's long position.| Dupont De vs. Direxion Daily FTSE | Dupont De vs. Collegium Pharmaceutical | Dupont De vs. KKR Co LP | Dupont De vs. iShares Dividend and |
| Old Second vs. Ohio Valley Banc | Old Second vs. Peoples Bancorp | Old Second vs. OceanFirst Financial Corp | Old Second vs. QCR Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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