Correlation Between MetLife and Dupont De
Can any of the company-specific risk be diversified away by investing in both MetLife and Dupont De 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 MetLife and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetLife and Dupont De Nemours, you can compare the effects of market volatilities on MetLife and Dupont De 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 MetLife with a short position of Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetLife and Dupont De.
Diversification Opportunities for MetLife and Dupont De
Modest diversification
The 3 months correlation between MetLife and Dupont is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours and MetLife 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 MetLife are associated (or correlated) with Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of MetLife i.e., MetLife and Dupont De go up and down completely randomly.
Pair Corralation between MetLife and Dupont De
Considering the 90-day investment horizon MetLife is expected to under-perform the Dupont De. But the stock apears to be less risky and, when comparing its historical volatility, MetLife is 1.73 times less risky than Dupont De. The stock trades about -0.01 of its potential returns per unit of risk. The Dupont De Nemours is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,666 in Dupont De Nemours on December 1, 2024 and sell it today you would earn a total of 511.00 from holding Dupont De Nemours or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetLife vs. Dupont De Nemours
Performance |
| Timeline |
| MetLife |
| Dupont De Nemours |
MetLife and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetLife and Dupont De
The main advantage of trading using opposite MetLife and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetLife position performs unexpectedly, Dupont De 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 Dupont De will offset losses from the drop in Dupont De's long position.| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Brighthouse Financial | MetLife vs. Unum Group |
| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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