Correlation Between Dupont De and Swire Properties
Can any of the company-specific risk be diversified away by investing in both Dupont De and Swire Properties 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 Swire Properties 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 Swire Properties Limited, you can compare the effects of market volatilities on Dupont De and Swire Properties 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 Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Swire Properties.
Diversification Opportunities for Dupont De and Swire Properties
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Swire is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties 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 Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of Dupont De i.e., Dupont De and Swire Properties go up and down completely randomly.
Pair Corralation between Dupont De and Swire Properties
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.98 times more return on investment than Swire Properties. However, Dupont De Nemours is 1.02 times less risky than Swire Properties. It trades about 0.01 of its potential returns per unit of risk. Swire Properties Limited is currently generating about -0.07 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 29, 2024 and sell it today you would lose (7.00) from holding Dupont De Nemours or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Swire Properties Limited
Performance |
| Timeline |
| Dupont De Nemours |
| Swire Properties |
Dupont De and Swire Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Swire Properties
The main advantage of trading using opposite Dupont De and Swire Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Swire Properties 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 Swire Properties will offset losses from the drop in Swire Properties' long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Swire Properties vs. CVS Health | Swire Properties vs. Southwest Airlines Co | Swire Properties vs. Bausch Health Companies | Swire Properties vs. JAPAN AIRLINES |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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