Correlation Between Dupont De and Saipem SpA
Can any of the company-specific risk be diversified away by investing in both Dupont De and Saipem SpA 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 Saipem SpA 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 Saipem SpA, you can compare the effects of market volatilities on Dupont De and Saipem SpA 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 Saipem SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Saipem SpA.
Diversification Opportunities for Dupont De and Saipem SpA
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Saipem is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Saipem SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saipem SpA 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 Saipem SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saipem SpA has no effect on the direction of Dupont De i.e., Dupont De and Saipem SpA go up and down completely randomly.
Pair Corralation between Dupont De and Saipem SpA
Allowing for the 90-day total investment horizon Dupont De is expected to generate 3.33 times less return on investment than Saipem SpA. But when comparing it to its historical volatility, Dupont De Nemours is 2.66 times less risky than Saipem SpA. It trades about 0.05 of its potential returns per unit of risk. Saipem SpA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Saipem SpA on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Saipem SpA or generate 69.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Saipem SpA
Performance |
| Timeline |
| Dupont De Nemours |
| Saipem SpA |
Dupont De and Saipem SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Saipem SpA
The main advantage of trading using opposite Dupont De and Saipem SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Saipem SpA 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 Saipem SpA will offset losses from the drop in Saipem SpA's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Saipem SpA vs. Worley Parsons | Saipem SpA vs. Petrofac Ltd ADR | Saipem SpA vs. SMG Industries | Saipem SpA vs. NXT Energy Solutions |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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