Correlation Between Dupont De and Swiss Life
Can any of the company-specific risk be diversified away by investing in both Dupont De and Swiss Life 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 Swiss Life 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 Swiss Life Holding, you can compare the effects of market volatilities on Dupont De and Swiss Life 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 Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Swiss Life.
Diversification Opportunities for Dupont De and Swiss Life
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Swiss is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of Dupont De i.e., Dupont De and Swiss Life go up and down completely randomly.
Pair Corralation between Dupont De and Swiss Life
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.43 times less return on investment than Swiss Life. In addition to that, Dupont De is 1.03 times more volatile than Swiss Life Holding. It trades about 0.03 of its total potential returns per unit of risk. Swiss Life Holding is currently generating about 0.04 per unit of volatility. If you would invest 4,044 in Swiss Life Holding on September 2, 2024 and sell it today you would earn a total of 115.00 from holding Swiss Life Holding or generate 2.84% 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. Swiss Life Holding
Performance |
| Timeline |
| Dupont De Nemours |
| Swiss Life Holding |
Dupont De and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Swiss Life
The main advantage of trading using opposite Dupont De and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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