Correlation Between Dupont De and Brunel International

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

Diversification Opportunities for Dupont De and Brunel International

0.15

Correlation Coefficient

Dupont De  Brunel International

Average diversification

The 3 months correlation between Dupont and Brunel is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Brunel International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunel 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 Brunel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunel International has no effect on the direction of Dupont De i.e., Dupont De and Brunel International go up and down completely randomly.

Pair Corralation between Dupont De and Brunel International

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Brunel International. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.14 times less risky than Brunel International. The stock trades about -0.01 of its potential returns per unit of risk. The Brunel International NV is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  890.00  in Brunel International NV on December 29, 2024 and sell it today you would earn a total of  156.00  from holding Brunel International NV or generate 17.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Dupont De Nemours  vs.  Brunel International NV

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.

Brunel International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brunel International NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Brunel International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Brunel International

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

The idea behind Dupont De Nemours and Brunel International NV 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.