Correlation Between Dupont De and ESGEN Acquisition

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

Diversification Opportunities for Dupont De and ESGEN Acquisition

0.0

Correlation Coefficient

Dupont De  ESGEN Acquisition

Pay attention - limited upside

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

Pair Corralation between Dupont De and ESGEN Acquisition

If you would invest  7,625  in Dupont De Nemours on December 27, 2024 and sell it today you would lose (29.00) from holding Dupont De Nemours or give up 0.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dupont De Nemours  vs.  ESGEN Acquisition 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.

ESGEN Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ESGEN Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, ESGEN Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dupont De and ESGEN Acquisition

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

The idea behind Dupont De Nemours and ESGEN Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.