Correlation Between Dupont De and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Dupont De and Webster Financial 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 Webster Financial 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 Webster Financial, you can compare the effects of market volatilities on Dupont De and Webster Financial 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 Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Webster Financial.
Diversification Opportunities for Dupont De and Webster Financial
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Webster is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial 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 Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of Dupont De i.e., Dupont De and Webster Financial go up and down completely randomly.
Pair Corralation between Dupont De and Webster Financial
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.72 times less return on investment than Webster Financial. But when comparing it to its historical volatility, Dupont De Nemours is 1.59 times less risky than Webster Financial. It trades about 0.04 of its potential returns per unit of risk. Webster Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,468 in Webster Financial on August 28, 2024 and sell it today you would earn a total of 1,814 from holding Webster Financial or generate 40.6% 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. Webster Financial
Performance |
| Timeline |
| Dupont De Nemours |
| Webster Financial |
Dupont De and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Webster Financial
The main advantage of trading using opposite Dupont De and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Webster Financial 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 Webster Financial will offset losses from the drop in Webster Financial's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Webster Financial vs. Fifth Third Bancorp | Webster Financial vs. Zions Bancorporation | Webster Financial vs. Huntington Bancshares Incorporated | Webster Financial vs. Comerica |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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