Correlation Between Dupont De and Hainan Haiyao

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

Diversification Opportunities for Dupont De and Hainan Haiyao

0.56

Correlation Coefficient

Dupont De  Hainan Haiyao

Very weak diversification

The 3 months correlation between Dupont and Hainan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Hainan Haiyao Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hainan Haiyao 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 Hainan Haiyao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hainan Haiyao has no effect on the direction of Dupont De i.e., Dupont De and Hainan Haiyao go up and down completely randomly.

Pair Corralation between Dupont De and Hainan Haiyao

Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.68 times less return on investment than Hainan Haiyao. But when comparing it to its historical volatility, Dupont De Nemours is 1.95 times less risky than Hainan Haiyao. It trades about 0.1 of its potential returns per unit of risk. Hainan Haiyao Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Hainan Haiyao Co on December 11, 2024 and sell it today you would earn a total of  67.00  from holding Hainan Haiyao Co or generate 15.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.5%
Values	Daily Returns

Dupont De Nemours  vs.  Hainan Haiyao Co

Dupont De Nemours

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Hainan Haiyao

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hainan Haiyao Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dupont De and Hainan Haiyao

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

The idea behind Dupont De Nemours and Hainan Haiyao Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.