Correlation Between Dupont De and Continental Aktiengesellscha

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

Diversification Opportunities for Dupont De and Continental Aktiengesellscha

0.0

Correlation Coefficient

Dupont De  Continental Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between Dupont and Continental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha 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 Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Dupont De i.e., Dupont De and Continental Aktiengesellscha go up and down completely randomly.

Pair Corralation between Dupont De and Continental Aktiengesellscha

Allowing for the 90-day total investment horizon Dupont De is expected to generate 17.83 times less return on investment than Continental Aktiengesellscha. But when comparing it to its historical volatility, Dupont De Nemours is 2.04 times less risky than Continental Aktiengesellscha. It trades about 0.0 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,116  in Continental Aktiengesellschaft on August 30, 2024 and sell it today you would earn a total of  54.00  from holding Continental Aktiengesellschaft or generate 0.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Dupont De Nemours  vs.  Continental Aktiengesellschaft

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 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.

Continental Aktiengesellscha

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Continental Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dupont De and Continental Aktiengesellscha

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

The idea behind Dupont De Nemours and Continental Aktiengesellschaft 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.