Correlation Between Dupont De and Canadian Imperial
Can any of the company-specific risk be diversified away by investing in both Dupont De and Canadian Imperial 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 Canadian Imperial 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 Canadian Imperial Bank, you can compare the effects of market volatilities on Dupont De and Canadian Imperial 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 Canadian Imperial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Canadian Imperial.
Diversification Opportunities for Dupont De and Canadian Imperial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dupont and Canadian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Canadian Imperial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Imperial Bank 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 Canadian Imperial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Imperial Bank has no effect on the direction of Dupont De i.e., Dupont De and Canadian Imperial go up and down completely randomly.
Pair Corralation between Dupont De and Canadian Imperial
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.56 times more return on investment than Canadian Imperial. However, Dupont De is 1.56 times more volatile than Canadian Imperial Bank. It trades about -0.05 of its potential returns per unit of risk. Canadian Imperial Bank is currently generating about -0.18 per unit of risk. If you would invest 7,451 in Dupont De Nemours on January 20, 2024 and sell it today you would lose (98.00) from holding Dupont De Nemours or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. Canadian Imperial Bank
Performance |
| Timeline |
| Dupont De Nemours |
| Canadian Imperial Bank |
Dupont De and Canadian Imperial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Canadian Imperial
The main advantage of trading using opposite Dupont De and Canadian Imperial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Canadian Imperial 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 Canadian Imperial will offset losses from the drop in Canadian Imperial's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Canadian Imperial vs. Slate Grocery REIT | Canadian Imperial vs. Fennec Pharmaceuticals | Canadian Imperial vs. Roots Corp | Canadian Imperial vs. Frontera Energy 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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