Correlation Between Dupont De and Opko Health
Can any of the company-specific risk be diversified away by investing in both Dupont De and Opko Health 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 Opko Health 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 Opko Health, you can compare the effects of market volatilities on Dupont De and Opko Health 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 Opko Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Opko Health.
Diversification Opportunities for Dupont De and Opko Health
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dupont and Opko is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Opko Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opko Health 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 Opko Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opko Health has no effect on the direction of Dupont De i.e., Dupont De and Opko Health go up and down completely randomly.
Pair Corralation between Dupont De and Opko Health
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.69 times less return on investment than Opko Health. But when comparing it to its historical volatility, Dupont De Nemours is 2.51 times less risky than Opko Health. It trades about 0.17 of its potential returns per unit of risk. Opko Health is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 36,400 in Opko Health on January 26, 2024 and sell it today you would earn a total of 11,470 from holding Opko Health or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.42% |
| Values | Daily Returns |
Dupont De Nemours vs. Opko Health
Performance |
| Timeline |
| Dupont De Nemours |
| Opko Health |
Dupont De and Opko Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Opko Health
The main advantage of trading using opposite Dupont De and Opko Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Opko Health 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 Opko Health will offset losses from the drop in Opko Health's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Opko Health vs. Teva Pharmaceutical Industries | Opko Health vs. Tower Semiconductor | Opko Health vs. Nice | Opko Health vs. Kamada |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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