Correlation Between Dupont De and XDN
Can any of the company-specific risk be diversified away by investing in both Dupont De and XDN 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 XDN 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 XDN, you can compare the effects of market volatilities on Dupont De and XDN 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 XDN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and XDN.
Diversification Opportunities for Dupont De and XDN
Good diversification
The 3 months correlation between Dupont and XDN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and XDN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XDN 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 XDN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XDN has no effect on the direction of Dupont De i.e., Dupont De and XDN go up and down completely randomly.
Pair Corralation between Dupont De and XDN
Allowing for the 90-day total investment horizon Dupont De is expected to generate 51.75 times less return on investment than XDN. But when comparing it to its historical volatility, Dupont De Nemours is 2.87 times less risky than XDN. It trades about 0.02 of its potential returns per unit of risk. XDN is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 0.00 in XDN on August 30, 2024 and sell it today you would earn a total of 0.00 from holding XDN or generate 48.28% 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. XDN
Performance |
| Timeline |
| Dupont De Nemours |
| XDN |
Dupont De and XDN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and XDN
The main advantage of trading using opposite Dupont De and XDN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, XDN 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 XDN will offset losses from the drop in XDN's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |