Correlation Between Dupont De and Ashot Ashkelon

Can any of the company-specific risk be diversified away by investing in both Dupont De and Ashot Ashkelon 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 Ashot Ashkelon 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 Ashot Ashkelon Industries, you can compare the effects of market volatilities on Dupont De and Ashot Ashkelon 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 Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Ashot Ashkelon.

Diversification Opportunities for Dupont De and Ashot Ashkelon

0.21

Correlation Coefficient

Dupont De  Ashot Ashkelon

Modest diversification

The 3 months correlation between Dupont and Ashot is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries 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 Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Dupont De i.e., Dupont De and Ashot Ashkelon go up and down completely randomly.

Pair Corralation between Dupont De and Ashot Ashkelon

Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.47 times less return on investment than Ashot Ashkelon. But when comparing it to its historical volatility, Dupont De Nemours is 2.14 times less risky than Ashot Ashkelon. It trades about 0.06 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  268,000  in Ashot Ashkelon Industries on February 4, 2024 and sell it today you would earn a total of  20,300  from holding Ashot Ashkelon Industries or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	65.22%
Values	Daily Returns

Dupont De Nemours  vs.  Ashot Ashkelon Industries

Dupont De Nemours

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ashot Ashkelon Industries

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ashot Ashkelon Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ashot Ashkelon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Ashot Ashkelon

The main advantage of trading using opposite Dupont De and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.

The idea behind Dupont De Nemours and Ashot Ashkelon Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.