Correlation Between Dupont De and Photronics
Can any of the company-specific risk be diversified away by investing in both Dupont De and Photronics 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 Photronics 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 Photronics, you can compare the effects of market volatilities on Dupont De and Photronics 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 Photronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Photronics.
Diversification Opportunities for Dupont De and Photronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Photronics is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics 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 Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of Dupont De i.e., Dupont De and Photronics go up and down completely randomly.
Pair Corralation between Dupont De and Photronics
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.71 times more return on investment than Photronics. However, Dupont De Nemours is 1.4 times less risky than Photronics. It trades about 0.19 of its potential returns per unit of risk. Photronics is currently generating about -0.18 per unit of risk. If you would invest 7,445 in Dupont De Nemours on November 9, 2024 and sell it today you would earn a total of 303.00 from holding Dupont De Nemours or generate 4.07% 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. Photronics
Performance |
| Timeline |
| Dupont De Nemours |
| Photronics |
Dupont De and Photronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Photronics
The main advantage of trading using opposite Dupont De and Photronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Photronics 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 Photronics will offset losses from the drop in Photronics' long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Photronics vs. Aehr Test Systems | Photronics vs. Lam Research Corp | Photronics vs. KLA Tencor | Photronics vs. Kulicke and Soffa |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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