Correlation Between Dupont De and SES SA
Can any of the company-specific risk be diversified away by investing in both Dupont De and SES SA 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 SES SA 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 SES SA, you can compare the effects of market volatilities on Dupont De and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and SES SA.
Diversification Opportunities for Dupont De and SES SA
Poor diversification
The 3 months correlation between Dupont and SES is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Dupont De i.e., Dupont De and SES SA go up and down completely randomly.
Pair Corralation between Dupont De and SES SA
Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.69 times less return on investment than SES SA. But when comparing it to its historical volatility, Dupont De Nemours is 2.19 times less risky than SES SA. It trades about 0.17 of its potential returns per unit of risk. SES SA is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 310.00 in SES SA on December 1, 2024 and sell it today you would earn a total of 115.00 from holding SES SA or generate 37.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. SES SA
Performance |
| Timeline |
| Dupont De Nemours |
| SES SA |
Dupont De and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and SES SA
The main advantage of trading using opposite Dupont De and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| SES SA vs. BII Railway Transportation | SES SA vs. SPORTING | SES SA vs. GUILD ESPORTS PLC | SES SA vs. EMPEROR ENT HOTEL |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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