Correlation Between Dupont De and SIKA AG
Can any of the company-specific risk be diversified away by investing in both Dupont De and SIKA AG 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 SIKA AG 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 SIKA AG UNSPADR, you can compare the effects of market volatilities on Dupont De and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and SIKA AG.
Diversification Opportunities for Dupont De and SIKA AG
Poor diversification
The 3 months correlation between Dupont and SIKA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Dupont De i.e., Dupont De and SIKA AG go up and down completely randomly.
Pair Corralation between Dupont De and SIKA AG
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.77 times more return on investment than SIKA AG. However, Dupont De Nemours is 1.3 times less risky than SIKA AG. It trades about 0.02 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about -0.03 per unit of risk. If you would invest 7,520 in Dupont De Nemours on November 7, 2024 and sell it today you would earn a total of 205.00 from holding Dupont De Nemours or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Dupont De Nemours vs. SIKA AG UNSPADR
Performance |
| Timeline |
| Dupont De Nemours |
| SIKA AG UNSPADR |
Dupont De and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and SIKA AG
The main advantage of trading using opposite Dupont De and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| SIKA AG vs. BII Railway Transportation | SIKA AG vs. PLAYMATES TOYS | SIKA AG vs. PARKEN Sport Entertainment | SIKA AG vs. Yuexiu Transport Infrastructure |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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