Correlation Between Dupont De and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Dupont De and Platinum 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 Platinum 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 Platinum Asia Investments, you can compare the effects of market volatilities on Dupont De and Platinum 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 Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Platinum Asia.
Diversification Opportunities for Dupont De and Platinum Asia
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Platinum is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Dupont De i.e., Dupont De and Platinum Asia go up and down completely randomly.
Pair Corralation between Dupont De and Platinum Asia
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.16 times more return on investment than Platinum Asia. However, Dupont De is 1.16 times more volatile than Platinum Asia Investments. It trades about 0.03 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.22 per unit of risk. If you would invest 8,299 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Dupont De Nemours or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. Platinum Asia Investments
Performance |
| Timeline |
| Dupont De Nemours |
| Platinum Asia Investments |
Dupont De and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Platinum Asia
The main advantage of trading using opposite Dupont De and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Platinum 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 Platinum Asia will offset losses from the drop in Platinum Asia's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Platinum Asia vs. Navigator Global Investments | Platinum Asia vs. Diversified United Investment | Platinum Asia vs. Garda Diversified Ppty | Platinum Asia vs. Argo Investments |
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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