Correlation Between Dupont De and Kolon Globalco
Can any of the company-specific risk be diversified away by investing in both Dupont De and Kolon Globalco 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 Kolon Globalco 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 Kolon Globalco, you can compare the effects of market volatilities on Dupont De and Kolon Globalco 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 Kolon Globalco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Kolon Globalco.
Diversification Opportunities for Dupont De and Kolon Globalco
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Kolon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Kolon Globalco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Globalco 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 Kolon Globalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Globalco has no effect on the direction of Dupont De i.e., Dupont De and Kolon Globalco go up and down completely randomly.
Pair Corralation between Dupont De and Kolon Globalco
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Kolon Globalco. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 6.76 times less risky than Kolon Globalco. The stock trades about -0.06 of its potential returns per unit of risk. The Kolon Globalco is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 921,000 in Kolon Globalco on September 12, 2024 and sell it today you would lose (40,000) from holding Kolon Globalco or give up 4.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Dupont De Nemours vs. Kolon Globalco
Performance |
Timeline |
Dupont De Nemours |
Kolon Globalco |
Dupont De and Kolon Globalco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dupont De and Kolon Globalco
The main advantage of trading using opposite Dupont De and Kolon Globalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Kolon Globalco 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 Kolon Globalco will offset losses from the drop in Kolon Globalco's long position.Dupont De vs. Griffon | Dupont De vs. Merck Company | Dupont De vs. Brinker International | Dupont De vs. Alcoa Corp |
Kolon Globalco vs. Korea New Network | Kolon Globalco vs. Solution Advanced Technology | Kolon Globalco vs. Busan Industrial Co | Kolon Globalco vs. Busan Ind |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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