Correlation Between Dupont De and Bosideng International

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

Diversification Opportunities for Dupont De and Bosideng International

0.16

Correlation Coefficient

Dupont De  Bosideng International

Average diversification

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

Pair Corralation between Dupont De and Bosideng International

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Bosideng International. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 2.17 times less risky than Bosideng International. The stock trades about -0.01 of its potential returns per unit of risk. The Bosideng International Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Bosideng International Holdings on December 29, 2024 and sell it today you would lose (1.00) from holding Bosideng International Holdings or give up 2.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Dupont De Nemours  vs.  Bosideng International Holding

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bosideng International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bosideng International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bosideng International is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dupont De and Bosideng International

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

The idea behind Dupont De Nemours and Bosideng International Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.