Correlation Between Dupont De and Simt Small
Can any of the company-specific risk be diversified away by investing in both Dupont De and Simt Small 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 Simt Small 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 Simt Small Cap, you can compare the effects of market volatilities on Dupont De and Simt Small 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 Simt Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Simt Small.
Diversification Opportunities for Dupont De and Simt Small
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and Simt is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Simt Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Small Cap 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 Simt Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Small Cap has no effect on the direction of Dupont De i.e., Dupont De and Simt Small go up and down completely randomly.
Pair Corralation between Dupont De and Simt Small
Allowing for the 90-day total investment horizon Dupont De is expected to generate 9.37 times less return on investment than Simt Small. But when comparing it to its historical volatility, Dupont De Nemours is 1.08 times less risky than Simt Small. It trades about 0.03 of its potential returns per unit of risk. Simt Small Cap is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,618 in Simt Small Cap on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Simt Small Cap or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. Simt Small Cap
Performance |
| Timeline |
| Dupont De Nemours |
| Simt Small Cap |
Dupont De and Simt Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Simt Small
The main advantage of trading using opposite Dupont De and Simt Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Simt Small 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 Simt Small will offset losses from the drop in Simt Small's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Simt Small vs. Simt Multi Asset Accumulation | Simt Small vs. Saat Market Growth | Simt Small vs. Simt Real Return | Simt Small vs. Simt Small Cap |
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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