Correlation Between Dupont De and BM European
Can any of the company-specific risk be diversified away by investing in both Dupont De and BM European 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 BM European 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 BM European Value, you can compare the effects of market volatilities on Dupont De and BM European 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 BM European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and BM European.
Diversification Opportunities for Dupont De and BM European
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and BMRRY is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and BM European Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BM European Value 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 BM European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BM European Value has no effect on the direction of Dupont De i.e., Dupont De and BM European go up and down completely randomly.
Pair Corralation between Dupont De and BM European
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.87 times more return on investment than BM European. However, Dupont De Nemours is 1.15 times less risky than BM European. It trades about 0.03 of its potential returns per unit of risk. BM European Value is currently generating about -0.04 per unit of risk. If you would invest 6,692 in Dupont De Nemours on December 2, 2024 and sell it today you would earn a total of 1,485 from holding Dupont De Nemours or generate 22.19% 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. BM European Value
Performance |
Timeline |
Dupont De Nemours |
BM European Value |
Dupont De and BM European Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dupont De and BM European
The main advantage of trading using opposite Dupont De and BM European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, BM European 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 BM European will offset losses from the drop in BM European's long position.Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
BM European vs. Wal Mart de | BM European vs. Ollies Bargain Outlet | BM European vs. Dollar General | BM European vs. BM European Value |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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