Correlation Between Dupont Denemours and Celanese Corp

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Can any of the company-specific risk be diversified away by investing in both Dupont Denemours and Celanese Corp 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 Denemours and Celanese Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont Denemours and Celanese Corp, you can compare the effects of market volatilities on Dupont Denemours and Celanese Corp 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 Denemours with a short position of Celanese Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont Denemours and Celanese Corp.

Diversification Opportunities for Dupont Denemours and Celanese Corp

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Dupont and Celanese is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dupont Denemours and Celanese Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celanese Corp and Dupont Denemours 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 Denemours are associated (or correlated) with Celanese Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celanese Corp has no effect on the direction of Dupont Denemours i.e., Dupont Denemours and Celanese Corp go up and down completely randomly.

Pair Corralation between Dupont Denemours and Celanese Corp

Allowing for the 90-day total investment horizon Dupont Denemours is expected to generate 0.99 times more return on investment than Celanese Corp. However, Dupont Denemours is 1.01 times less risky than Celanese Corp. It trades about 0.0 of its potential returns per unit of risk. Celanese Corp is currently generating about -0.02 per unit of risk. If you would invest  5,624  in Dupont Denemours on June 29, 2022 and sell it today you would lose (605.00)  from holding Dupont Denemours or give up 10.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Dupont Denemours  vs.  Celanese Corp

 Performance (%) 
       Timeline  
Dupont Denemours 
Dupont Performance
0 of 100
Over the last 90 days Dupont Denemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Dupont Price Channel

Celanese Corp 
Celanese Performance
0 of 100
Over the last 90 days Celanese Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Celanese Price Channel

Dupont Denemours and Celanese Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont Denemours and Celanese Corp

The main advantage of trading using opposite Dupont Denemours and Celanese Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont Denemours position performs unexpectedly, Celanese Corp 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 Celanese Corp will offset losses from the drop in Celanese Corp's long position.
Dupont Denemours vs. Kibush Capital Corp
The idea behind Dupont Denemours and Celanese Corp 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.
Celanese Corp vs. Kibush Capital Corp
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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