Correlation Between Dupont De and SCB X
Can any of the company-specific risk be diversified away by investing in both Dupont De and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Dupont De and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and SCB X.
Diversification Opportunities for Dupont De and SCB X
Good diversification
The 3 months correlation between Dupont and SCB is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Dupont De i.e., Dupont De and SCB X go up and down completely randomly.
Pair Corralation between Dupont De and SCB X
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.79 times less return on investment than SCB X. In addition to that, Dupont De is 2.55 times more volatile than SCB X Public. It trades about 0.03 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.13 per unit of volatility. If you would invest 11,200 in SCB X Public on August 31, 2024 and sell it today you would earn a total of 200.00 from holding SCB X Public or generate 1.79% 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. SCB X Public
Performance |
| Timeline |
| Dupont De Nemours |
| SCB X Public |
Dupont De and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and SCB X
The main advantage of trading using opposite Dupont De and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Air Products and | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc |
| SCB X vs. Bangkok Dusit Medical | SCB X vs. Bank of Ayudhya | SCB X vs. KTBST Mixed Leasehold | SCB X vs. TISCO Financial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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