Correlation Between Dupont De and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both Dupont De and Unilever PLC 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 Unilever PLC 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 Unilever PLC, you can compare the effects of market volatilities on Dupont De and Unilever PLC 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 Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Unilever PLC.
Diversification Opportunities for Dupont De and Unilever PLC
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Unilever is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC 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 Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of Dupont De i.e., Dupont De and Unilever PLC go up and down completely randomly.
Pair Corralation between Dupont De and Unilever PLC
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.55 times more return on investment than Unilever PLC. However, Dupont De is 1.55 times more volatile than Unilever PLC. It trades about 0.03 of its potential returns per unit of risk. Unilever PLC is currently generating about -0.06 per unit of risk. If you would invest 8,212 in Dupont De Nemours on September 2, 2024 and sell it today you would earn a total of 147.00 from holding Dupont De Nemours or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.97% |
| Values | Daily Returns |
Dupont De Nemours vs. Unilever PLC
Performance |
| Timeline |
| Dupont De Nemours |
| Unilever PLC |
Dupont De and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Unilever PLC
The main advantage of trading using opposite Dupont De and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Unilever PLC vs. Samsung Electronics Co | Unilever PLC vs. Samsung Electronics Co | Unilever PLC vs. Toyota Motor Corp | Unilever PLC vs. Reliance Industries Ltd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |