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 ADR, 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
Modest diversification
The 3 months correlation between Dupont and Sika is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Sika AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sika AG 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 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 ADR 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 1.25 times more return on investment than Sika AG. However, Dupont De is 1.25 times more volatile than Sika AG ADR. It trades about 0.03 of its potential returns per unit of risk. Sika AG ADR is currently generating about -0.42 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 27, 2024 and sell it today you would earn a total of 52.00 from holding Dupont De Nemours or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Sika AG ADR
Performance |
| Timeline |
| Dupont De Nemours |
| Sika AG ADR |
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. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |