Correlation Between Dupont De and Xeros Technology
Can any of the company-specific risk be diversified away by investing in both Dupont De and Xeros Technology 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 Xeros Technology 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 Xeros Technology Group, you can compare the effects of market volatilities on Dupont De and Xeros Technology 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 Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Xeros Technology.
Diversification Opportunities for Dupont De and Xeros Technology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Xeros is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology 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 Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Dupont De i.e., Dupont De and Xeros Technology go up and down completely randomly.
Pair Corralation between Dupont De and Xeros Technology
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Xeros Technology. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 6.1 times less risky than Xeros Technology. The stock trades about -0.26 of its potential returns per unit of risk. The Xeros Technology Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Xeros Technology Group on October 17, 2024 and sell it today you would earn a total of 10.00 from holding Xeros Technology Group or generate 23.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Xeros Technology Group
Performance |
| Timeline |
| Dupont De Nemours |
| Xeros Technology |
Dupont De and Xeros Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Xeros Technology
The main advantage of trading using opposite Dupont De and Xeros Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Xeros Technology 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 Xeros Technology will offset losses from the drop in Xeros Technology's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Xeros Technology vs. Taiwan Semiconductor Manufacturing | Xeros Technology vs. XLMedia PLC | Xeros Technology vs. Zinc Media Group | Xeros Technology vs. Liberty Media Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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