Correlation Between Dupont De and Samsung KODEX

Can any of the company-specific risk be diversified away by investing in both Dupont De and Samsung KODEX 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 Samsung KODEX 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 Samsung KODEX 200, you can compare the effects of market volatilities on Dupont De and Samsung KODEX 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 Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Samsung KODEX.

Diversification Opportunities for Dupont De and Samsung KODEX

0.45

Correlation Coefficient

Dupont De  Samsung KODEX

Very weak diversification

The 3 months correlation between Dupont and Samsung is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Samsung KODEX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX 200 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 Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX 200 has no effect on the direction of Dupont De i.e., Dupont De and Samsung KODEX go up and down completely randomly.

Pair Corralation between Dupont De and Samsung KODEX

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Samsung KODEX. In addition to that, Dupont De is 1.54 times more volatile than Samsung KODEX 200. It trades about -0.01 of its total potential returns per unit of risk. Samsung KODEX 200 is currently generating about 0.19 per unit of volatility. If you would invest  1,137,000  in Samsung KODEX 200 on December 22, 2024 and sell it today you would earn a total of  125,000  from holding Samsung KODEX 200 or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

Dupont De Nemours  vs.  Samsung KODEX 200

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.

Samsung KODEX 200

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung KODEX 200 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung KODEX may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dupont De and Samsung KODEX

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

The idea behind Dupont De Nemours and Samsung KODEX 200 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.