Correlation Between Dupont De and Westport Fuel
Can any of the company-specific risk be diversified away by investing in both Dupont De and Westport Fuel 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 Westport Fuel 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 Westport Fuel Systems, you can compare the effects of market volatilities on Dupont De and Westport Fuel 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 Westport Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Westport Fuel.
Diversification Opportunities for Dupont De and Westport Fuel
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Westport is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Westport Fuel Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westport Fuel Systems 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 Westport Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westport Fuel Systems has no effect on the direction of Dupont De i.e., Dupont De and Westport Fuel go up and down completely randomly.
Pair Corralation between Dupont De and Westport Fuel
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.41 times more return on investment than Westport Fuel. However, Dupont De Nemours is 2.42 times less risky than Westport Fuel. It trades about 0.04 of its potential returns per unit of risk. Westport Fuel Systems is currently generating about -0.02 per unit of risk. If you would invest 6,747 in Dupont De Nemours on August 29, 2024 and sell it today you would earn a total of 1,643 from holding Dupont De Nemours or generate 24.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dupont De Nemours vs. Westport Fuel Systems
Performance |
| Timeline |
| Dupont De Nemours |
| Westport Fuel Systems |
Dupont De and Westport Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Westport Fuel
The main advantage of trading using opposite Dupont De and Westport Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Westport Fuel 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 Westport Fuel will offset losses from the drop in Westport Fuel's long position.| Dupont De vs. Direxion Daily FTSE | Dupont De vs. Collegium Pharmaceutical | Dupont De vs. KKR Co LP | Dupont De vs. iShares Dividend and |
| Westport Fuel vs. Eros Resources Corp | Westport Fuel vs. Apple Inc CDR | Westport Fuel vs. European Residential Real | Westport Fuel vs. Canadian Utilities 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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