Correlation Between Dupont De and ARK Autonomous

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

Diversification Opportunities for Dupont De and ARK Autonomous

0.01

Correlation Coefficient

Dupont De  ARK Autonomous

Significant diversification

The 3 months correlation between Dupont and ARK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and ARK Autonomous Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Autonomous Technology 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 ARK Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Autonomous Technology has no effect on the direction of Dupont De i.e., Dupont De and ARK Autonomous go up and down completely randomly.

Pair Corralation between Dupont De and ARK Autonomous

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.67 times more return on investment than ARK Autonomous. However, Dupont De Nemours is 1.49 times less risky than ARK Autonomous. It trades about 0.0 of its potential returns per unit of risk. ARK Autonomous Technology is currently generating about -0.09 per unit of risk. If you would invest  7,685  in Dupont De Nemours on December 26, 2024 and sell it today you would lose (36.00) from holding Dupont De Nemours or give up 0.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dupont De Nemours  vs.  ARK Autonomous Technology

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.

ARK Autonomous Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ARK Autonomous Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Etf's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Dupont De and ARK Autonomous

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

The idea behind Dupont De Nemours and ARK Autonomous Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.