Correlation Between Dupont De and Eos Energy

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

Diversification Opportunities for Dupont De and Eos Energy

-0.36

Correlation Coefficient

Dupont De  Eos Energy

Very good diversification

The 3 months correlation between Dupont and Eos is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Eos Energy Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eos Energy Enterprises 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 Eos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eos Energy Enterprises has no effect on the direction of Dupont De i.e., Dupont De and Eos Energy go up and down completely randomly.

Pair Corralation between Dupont De and Eos Energy

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.15 times more return on investment than Eos Energy. However, Dupont De Nemours is 6.6 times less risky than Eos Energy. It trades about 0.02 of its potential returns per unit of risk. Eos Energy Enterprises is currently generating about -0.15 per unit of risk. If you would invest  7,557  in Dupont De Nemours on December 28, 2024 and sell it today you would earn a total of  92.00  from holding Dupont De Nemours or generate 1.22% return on investment over 90 days.

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

Dupont De Nemours  vs.  Eos Energy Enterprises

Dupont De Nemours

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Eos Energy Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eos Energy Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Dupont De and Eos Energy

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

The idea behind Dupont De Nemours and Eos Energy Enterprises 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.