Correlation Between Dupont De and Capstone Infrastructure

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

Diversification Opportunities for Dupont De and Capstone Infrastructure

0.11

Correlation Coefficient

Dupont De  Capstone Infrastructure

Average diversification

The 3 months correlation between Dupont and Capstone is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Capstone Infrastructure Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Infrastructure 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 Capstone Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Infrastructure has no effect on the direction of Dupont De i.e., Dupont De and Capstone Infrastructure go up and down completely randomly.

Pair Corralation between Dupont De and Capstone Infrastructure

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Capstone Infrastructure. In addition to that, Dupont De is 1.43 times more volatile than Capstone Infrastructure Corp. It trades about -0.01 of its total potential returns per unit of risk. Capstone Infrastructure Corp is currently generating about 0.08 per unit of volatility. If you would invest  1,460  in Capstone Infrastructure Corp on December 30, 2024 and sell it today you would earn a total of  75.00  from holding Capstone Infrastructure Corp or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Dupont De Nemours  vs.  Capstone Infrastructure Corp

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.

Capstone Infrastructure

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Infrastructure Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Capstone Infrastructure is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dupont De and Capstone Infrastructure

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

The idea behind Dupont De Nemours and Capstone Infrastructure Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.