Correlation Between Dupont De and Sumitomo Corp
Can any of the company-specific risk be diversified away by investing in both Dupont De and Sumitomo Corp 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 Sumitomo Corp 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 Sumitomo Corp ADR, you can compare the effects of market volatilities on Dupont De and Sumitomo Corp 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 Sumitomo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Sumitomo Corp.
Diversification Opportunities for Dupont De and Sumitomo Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and Sumitomo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Sumitomo Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Corp ADR 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 Sumitomo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Corp ADR has no effect on the direction of Dupont De i.e., Dupont De and Sumitomo Corp go up and down completely randomly.
Pair Corralation between Dupont De and Sumitomo Corp
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.76 times more return on investment than Sumitomo Corp. However, Dupont De Nemours is 1.32 times less risky than Sumitomo Corp. It trades about 0.02 of its potential returns per unit of risk. Sumitomo Corp ADR is currently generating about -0.09 per unit of risk. If you would invest 8,179 in Dupont De Nemours on August 29, 2024 and sell it today you would earn a total of 205.00 from holding Dupont De Nemours or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Sumitomo Corp ADR
Performance |
| Timeline |
| Dupont De Nemours |
| Sumitomo Corp ADR |
Dupont De and Sumitomo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Sumitomo Corp
The main advantage of trading using opposite Dupont De and Sumitomo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Sumitomo Corp 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 Sumitomo Corp will offset losses from the drop in Sumitomo Corp's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Sumitomo Corp vs. Itochu Corp ADR | Sumitomo Corp vs. Mitsubishi Corp | Sumitomo Corp vs. ITOCHU | Sumitomo Corp vs. Marubeni Corp ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |