Correlation Between Dupont De and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Dupont De and Saint Jean 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 Saint Jean 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 Saint Jean Carbon, you can compare the effects of market volatilities on Dupont De and Saint Jean 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 Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Saint Jean.
Diversification Opportunities for Dupont De and Saint Jean
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Saint is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Saint Jean Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Carbon 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 Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Carbon has no effect on the direction of Dupont De i.e., Dupont De and Saint Jean go up and down completely randomly.
Pair Corralation between Dupont De and Saint Jean
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Saint Jean. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 8.2 times less risky than Saint Jean. The stock trades about -0.15 of its potential returns per unit of risk. The Saint Jean Carbon is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.90 in Saint Jean Carbon on January 9, 2025 and sell it today you would lose (0.64) from holding Saint Jean Carbon or give up 33.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Dupont De Nemours vs. Saint Jean Carbon
Performance |
| Timeline |
| Dupont De Nemours |
| Saint Jean Carbon |
Dupont De and Saint Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Saint Jean
The main advantage of trading using opposite Dupont De and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean'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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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