Correlation Between Dupont De and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Dupont De and Niu Technologies 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 Niu Technologies 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 Niu Technologies, you can compare the effects of market volatilities on Dupont De and Niu Technologies 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 Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Niu Technologies.
Diversification Opportunities for Dupont De and Niu Technologies
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and Niu is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies 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 Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Dupont De i.e., Dupont De and Niu Technologies go up and down completely randomly.
Pair Corralation between Dupont De and Niu Technologies
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Niu Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 7.68 times less risky than Niu Technologies. The stock trades about -0.26 of its potential returns per unit of risk. The Niu Technologies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Niu Technologies on February 1, 2024 and sell it today you would earn a total of 51.00 from holding Niu Technologies or generate 28.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dupont De Nemours vs. Niu Technologies
Performance |
Timeline |
Dupont De Nemours |
Niu Technologies |
Dupont De and Niu Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dupont De and Niu Technologies
The main advantage of trading using opposite Dupont De and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Niu Technologies 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 Niu Technologies will offset losses from the drop in Niu Technologies' long position.Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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