Correlation Between Dupont De and ROCKWOOL International
Can any of the company-specific risk be diversified away by investing in both Dupont De and ROCKWOOL International 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 ROCKWOOL International 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 ROCKWOOL International AS, you can compare the effects of market volatilities on Dupont De and ROCKWOOL International 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 ROCKWOOL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and ROCKWOOL International.
Diversification Opportunities for Dupont De and ROCKWOOL International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and ROCKWOOL is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and ROCKWOOL International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROCKWOOL International 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 ROCKWOOL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROCKWOOL International has no effect on the direction of Dupont De i.e., Dupont De and ROCKWOOL International go up and down completely randomly.
Pair Corralation between Dupont De and ROCKWOOL International
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the ROCKWOOL International. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.55 times less risky than ROCKWOOL International. The stock trades about -0.12 of its potential returns per unit of risk. The ROCKWOOL International AS is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 217,050 in ROCKWOOL International AS on January 24, 2024 and sell it today you would earn a total of 12,150 from holding ROCKWOOL International AS or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dupont De Nemours vs. ROCKWOOL International AS
Performance |
| Timeline |
| Dupont De Nemours |
| ROCKWOOL International |
Dupont De and ROCKWOOL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and ROCKWOOL International
The main advantage of trading using opposite Dupont De and ROCKWOOL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, ROCKWOOL International 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 ROCKWOOL International will offset losses from the drop in ROCKWOOL International's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| ROCKWOOL International vs. FLSmidth Co | ROCKWOOL International vs. GN Store Nord | ROCKWOOL International vs. Ambu AS | ROCKWOOL International vs. DSV Panalpina AS |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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