Correlation Between Dupont De and INFINITT Healthcare

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

Diversification Opportunities for Dupont De and INFINITT Healthcare

0.16

Correlation Coefficient

Dupont De  INFINITT Healthcare

Average diversification

The 3 months correlation between Dupont and INFINITT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and INFINITT Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFINITT Healthcare 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 INFINITT Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFINITT Healthcare has no effect on the direction of Dupont De i.e., Dupont De and INFINITT Healthcare go up and down completely randomly.

Pair Corralation between Dupont De and INFINITT Healthcare

Allowing for the 90-day total investment horizon Dupont De is expected to generate 83.41 times less return on investment than INFINITT Healthcare. But when comparing it to its historical volatility, Dupont De Nemours is 2.95 times less risky than INFINITT Healthcare. It trades about 0.0 of its potential returns per unit of risk. INFINITT Healthcare Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  410,500  in INFINITT Healthcare Co on December 27, 2024 and sell it today you would earn a total of  99,500  from holding INFINITT Healthcare Co or generate 24.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Dupont De Nemours  vs.  INFINITT Healthcare 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.

INFINITT Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INFINITT Healthcare Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, INFINITT Healthcare sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and INFINITT Healthcare

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

The idea behind Dupont De Nemours and INFINITT Healthcare 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.