Correlation Between Financial Select and Dupont De
Can any of the company-specific risk be diversified away by investing in both Financial Select 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 Financial Select and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Select Sector and Dupont De Nemours, you can compare the effects of market volatilities on Financial Select 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 Financial Select with a short position of Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Select and Dupont De.
Diversification Opportunities for Financial Select and Dupont De
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and Dupont is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Financial Select Sector 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 Financial Select 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 Financial Select Sector 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 Financial Select i.e., Financial Select and Dupont De go up and down completely randomly.
Pair Corralation between Financial Select and Dupont De
Considering the 90-day investment horizon Financial Select Sector is expected to generate 0.76 times more return on investment than Dupont De. However, Financial Select Sector is 1.31 times less risky than Dupont De. It trades about -0.01 of its potential returns per unit of risk. Dupont De Nemours is currently generating about -0.12 per unit of risk. If you would invest 4,126 in Financial Select Sector on January 25, 2024 and sell it today you would lose (13.00) from holding Financial Select Sector or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Financial Select Sector vs. Dupont De Nemours
Performance |
| Timeline |
| Financial Select Sector |
| Dupont De Nemours |
Financial Select and Dupont De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Select and Dupont De
The main advantage of trading using opposite Financial Select and Dupont De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Select 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.| Financial Select vs. Virtus InfraCap Preferred | Financial Select vs. XAI Octagon Floating | Financial Select vs. Amplify High Income | Financial Select vs. Triplepoint Venture Growth |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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