Correlation Between Dupont De and 1st Source
Can any of the company-specific risk be diversified away by investing in both Dupont De and 1st Source 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 1st Source 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 1st Source, you can compare the effects of market volatilities on Dupont De and 1st Source 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 1st Source. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and 1st Source.
Diversification Opportunities for Dupont De and 1st Source
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and 1st is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and 1st Source in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1st Source 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 1st Source. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1st Source has no effect on the direction of Dupont De i.e., Dupont De and 1st Source go up and down completely randomly.
Pair Corralation between Dupont De and 1st Source
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the 1st Source. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.06 times less risky than 1st Source. The stock trades about -0.02 of its potential returns per unit of risk. The 1st Source is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,221 in 1st Source on January 9, 2025 and sell it today you would earn a total of 1,207 from holding 1st Source or generate 28.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. 1st Source
Performance |
| Timeline |
| Dupont De Nemours |
| 1st Source |
Dupont De and 1st Source Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and 1st Source
The main advantage of trading using opposite Dupont De and 1st Source positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, 1st Source 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 1st Source will offset losses from the drop in 1st Source's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| 1st Source vs. Penns Woods Bancorp | 1st Source vs. Great Southern Bancorp | 1st Source vs. Waterstone Financial | 1st Source vs. Chemung Financial Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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