Correlation Between Dupont De and Celltrion Pharm

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

Diversification Opportunities for Dupont De and Celltrion Pharm

0.35

Correlation Coefficient

Dupont De  Celltrion Pharm

Weak diversification

The 3 months correlation between Dupont and Celltrion is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Celltrion Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celltrion Pharm 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 Celltrion Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celltrion Pharm has no effect on the direction of Dupont De i.e., Dupont De and Celltrion Pharm go up and down completely randomly.

Pair Corralation between Dupont De and Celltrion Pharm

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.59 times more return on investment than Celltrion Pharm. However, Dupont De Nemours is 1.71 times less risky than Celltrion Pharm. It trades about 0.02 of its potential returns per unit of risk. Celltrion Pharm is currently generating about -0.07 per unit of risk. If you would invest  7,231  in Dupont De Nemours on October 9, 2024 and sell it today you would earn a total of  277.00  from holding Dupont De Nemours or generate 3.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.76%
Values	Daily Returns

Dupont De Nemours  vs.  Celltrion Pharm

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.

Celltrion Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celltrion Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Dupont De and Celltrion Pharm

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

The idea behind Dupont De Nemours and Celltrion Pharm 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.