Correlation Between Dupont De and AB Sagax
Can any of the company-specific risk be diversified away by investing in both Dupont De and AB Sagax 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 AB Sagax 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 AB Sagax, you can compare the effects of market volatilities on Dupont De and AB Sagax 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 AB Sagax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and AB Sagax.
Diversification Opportunities for Dupont De and AB Sagax
Very poor diversification
The 3 months correlation between Dupont and SAGA-A is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and AB Sagax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Sagax 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 AB Sagax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Sagax has no effect on the direction of Dupont De i.e., Dupont De and AB Sagax go up and down completely randomly.
Pair Corralation between Dupont De and AB Sagax
Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.47 times less return on investment than AB Sagax. But when comparing it to its historical volatility, Dupont De Nemours is 2.32 times less risky than AB Sagax. It trades about 0.06 of its potential returns per unit of risk. AB Sagax is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 22,600 in AB Sagax on October 26, 2024 and sell it today you would earn a total of 1,200 from holding AB Sagax or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Dupont De Nemours vs. AB Sagax
Performance |
| Timeline |
| Dupont De Nemours |
| AB Sagax |
Dupont De and AB Sagax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and AB Sagax
The main advantage of trading using opposite Dupont De and AB Sagax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, AB Sagax 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 AB Sagax will offset losses from the drop in AB Sagax's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| AB Sagax vs. SolTech Energy Sweden | AB Sagax vs. White Pearl Technology | AB Sagax vs. USWE Sports AB | AB Sagax vs. Viva Wine Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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