Correlation Between Dupont De and JD HEALTH

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

Diversification Opportunities for Dupont De and JD HEALTH

-0.27

Correlation Coefficient

Dupont De  JD HEALTH

Very good diversification

The 3 months correlation between Dupont and 8ZN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Dupont De i.e., Dupont De and JD HEALTH go up and down completely randomly.

Pair Corralation between Dupont De and JD HEALTH

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.48 times more return on investment than JD HEALTH. However, Dupont De Nemours is 2.11 times less risky than JD HEALTH. It trades about 0.02 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about -0.03 per unit of risk. If you would invest  7,168  in Dupont De Nemours on October 24, 2024 and sell it today you would earn a total of  669.00  from holding Dupont De Nemours or generate 9.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.6%
Values	Daily Returns

Dupont De Nemours  vs.  JD HEALTH INTL

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.

JD HEALTH INTL

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JD HEALTH INTL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, JD HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and JD HEALTH

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

The idea behind Dupont De Nemours and JD HEALTH INTL 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.