Correlation Between Dupont De and SCI Electric
Can any of the company-specific risk be diversified away by investing in both Dupont De and SCI Electric 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 SCI Electric 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 SCI Electric Public, you can compare the effects of market volatilities on Dupont De and SCI Electric 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 SCI Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and SCI Electric.
Diversification Opportunities for Dupont De and SCI Electric
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and SCI is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and SCI Electric Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Electric 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 SCI Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Electric Public has no effect on the direction of Dupont De i.e., Dupont De and SCI Electric go up and down completely randomly.
Pair Corralation between Dupont De and SCI Electric
Allowing for the 90-day total investment horizon Dupont De is expected to generate 46.58 times less return on investment than SCI Electric. But when comparing it to its historical volatility, Dupont De Nemours is 30.66 times less risky than SCI Electric. It trades about 0.03 of its potential returns per unit of risk. SCI Electric Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 146.00 in SCI Electric Public on September 1, 2024 and sell it today you would lose (64.00) from holding SCI Electric Public or give up 43.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.14% |
| Values | Daily Returns |
Dupont De Nemours vs. SCI Electric Public
Performance |
| Timeline |
| Dupont De Nemours |
| SCI Electric Public |
Dupont De and SCI Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and SCI Electric
The main advantage of trading using opposite Dupont De and SCI Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, SCI Electric 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 SCI Electric will offset losses from the drop in SCI Electric's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| SCI Electric vs. Star Petroleum Refining | SCI Electric vs. Siri Prime Office | SCI Electric vs. SC Asset | SCI Electric vs. Solartron Public |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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