Correlation Between Dupont De and UNITED
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By analyzing existing cross correlation between Dupont De Nemours and UNITED TECHNOLOGIES P, you can compare the effects of market volatilities on Dupont De and UNITED 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 UNITED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and UNITED.
Diversification Opportunities for Dupont De and UNITED
Poor diversification
The 3 months correlation between Dupont and UNITED is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and UNITED TECHNOLOGIES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED TECHNOLOGIES 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 UNITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED TECHNOLOGIES has no effect on the direction of Dupont De i.e., Dupont De and UNITED go up and down completely randomly.
Pair Corralation between Dupont De and UNITED
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.58 times more return on investment than UNITED. However, Dupont De is 1.58 times more volatile than UNITED TECHNOLOGIES P. It trades about 0.05 of its potential returns per unit of risk. UNITED TECHNOLOGIES P is currently generating about -0.1 per unit of risk. If you would invest 8,250 in Dupont De Nemours on September 2, 2024 and sell it today you would earn a total of 109.00 from holding Dupont De Nemours or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Dupont De Nemours vs. UNITED TECHNOLOGIES P
Performance |
| Timeline |
| Dupont De Nemours |
| UNITED TECHNOLOGIES |
Dupont De and UNITED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and UNITED
The main advantage of trading using opposite Dupont De and UNITED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, UNITED 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 UNITED will offset losses from the drop in UNITED's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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