Correlation Between Dupont De and Western Asset
Can any of the company-specific risk be diversified away by investing in both Dupont De and Western Asset 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 Western Asset 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 Western Asset Imf, you can compare the effects of market volatilities on Dupont De and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Western Asset.
Diversification Opportunities for Dupont De and Western Asset
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Western is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Western Asset Imf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Imf 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Imf has no effect on the direction of Dupont De i.e., Dupont De and Western Asset go up and down completely randomly.
Pair Corralation between Dupont De and Western Asset
Allowing for the 90-day total investment horizon Dupont De is expected to generate 3.28 times less return on investment than Western Asset. In addition to that, Dupont De is 3.01 times more volatile than Western Asset Imf. It trades about 0.02 of its total potential returns per unit of risk. Western Asset Imf is currently generating about 0.22 per unit of volatility. If you would invest 791.00 in Western Asset Imf on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Western Asset Imf or generate 2.65% 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. Western Asset Imf
Performance |
| Timeline |
| Dupont De Nemours |
| Western Asset Imf |
Dupont De and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Western Asset
The main advantage of trading using opposite Dupont De and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Western Asset vs. Carlyle Secured Lending | Western Asset vs. Sixth Street Specialty | Western Asset vs. Golub Capital BDC | Western Asset vs. Fidus Investment Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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