Correlation Between Dupont De and Shinil Industrial

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

Diversification Opportunities for Dupont De and Shinil Industrial

0.39

Correlation Coefficient

Dupont De  Shinil Industrial

Weak diversification

The 3 months correlation between Dupont and Shinil is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Shinil Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Industrial 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 Shinil Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Industrial has no effect on the direction of Dupont De i.e., Dupont De and Shinil Industrial go up and down completely randomly.

Pair Corralation between Dupont De and Shinil Industrial

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Shinil Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.96 times less risky than Shinil Industrial. The stock trades about -0.59 of its potential returns per unit of risk. The Shinil Industrial Co is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  129,339  in Shinil Industrial Co on October 9, 2024 and sell it today you would earn a total of  13,061  from holding Shinil Industrial Co or generate 10.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Dupont De Nemours  vs.  Shinil Industrial Co

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

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 latest unfluctuating 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.

Shinil Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shinil Industrial Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shinil Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dupont De and Shinil Industrial

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

The idea behind Dupont De Nemours and Shinil Industrial 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.