Correlation Between Dupont De and Sixth Street
Can any of the company-specific risk be diversified away by investing in both Dupont De and Sixth Street 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 Sixth Street 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 Sixth Street Specialty, you can compare the effects of market volatilities on Dupont De and Sixth Street 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 Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Sixth Street.
Diversification Opportunities for Dupont De and Sixth Street
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Sixth is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Sixth Street Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixth Street Specialty 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 Sixth Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixth Street Specialty has no effect on the direction of Dupont De i.e., Dupont De and Sixth Street go up and down completely randomly.
Pair Corralation between Dupont De and Sixth Street
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Sixth Street. In addition to that, Dupont De is 1.66 times more volatile than Sixth Street Specialty. It trades about -0.01 of its total potential returns per unit of risk. Sixth Street Specialty is currently generating about 0.09 per unit of volatility. If you would invest 2,057 in Sixth Street Specialty on August 27, 2024 and sell it today you would earn a total of 37.00 from holding Sixth Street Specialty or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Sixth Street Specialty
Performance |
| Timeline |
| Dupont De Nemours |
| Sixth Street Specialty |
Dupont De and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Sixth Street
The main advantage of trading using opposite Dupont De and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Sixth Street 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 Sixth Street will offset losses from the drop in Sixth Street's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Sixth Street vs. New Mountain Finance | Sixth Street vs. Carlyle Secured Lending | Sixth Street vs. BlackRock TCP Capital | Sixth Street vs. Fidus Investment Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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