Correlation Between Dupont De and Golden Eagle
Can any of the company-specific risk be diversified away by investing in both Dupont De and Golden Eagle 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 Golden Eagle 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 Golden Eagle Energy, you can compare the effects of market volatilities on Dupont De and Golden Eagle 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 Golden Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Golden Eagle.
Diversification Opportunities for Dupont De and Golden Eagle
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Golden is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Golden Eagle Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Eagle Energy 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 Golden Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Eagle Energy has no effect on the direction of Dupont De i.e., Dupont De and Golden Eagle go up and down completely randomly.
Pair Corralation between Dupont De and Golden Eagle
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.6 times less return on investment than Golden Eagle. But when comparing it to its historical volatility, Dupont De Nemours is 1.52 times less risky than Golden Eagle. It trades about 0.03 of its potential returns per unit of risk. Golden Eagle Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 72,000 in Golden Eagle Energy on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Golden Eagle Energy or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. Golden Eagle Energy
Performance |
| Timeline |
| Dupont De Nemours |
| Golden Eagle Energy |
Dupont De and Golden Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Golden Eagle
The main advantage of trading using opposite Dupont De and Golden Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Golden Eagle 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 Golden Eagle will offset losses from the drop in Golden Eagle's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Golden Eagle vs. Mitrabahtera Segara Sejati | Golden Eagle vs. Weha Transportasi Indonesia | Golden Eagle vs. Rig Tenders Tbk | Golden Eagle vs. Rukun Raharja Tbk |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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