Correlation Between Dupont De and Evexx

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

Diversification Opportunities for Dupont De and Evexx

0.43

Correlation Coefficient

Dupont De  Evexx

Very weak diversification

The 3 months correlation between Dupont and Evexx is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Evexx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evexx 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 Evexx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evexx has no effect on the direction of Dupont De i.e., Dupont De and Evexx go up and down completely randomly.

Pair Corralation between Dupont De and Evexx

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.05 times more return on investment than Evexx. However, Dupont De Nemours is 19.13 times less risky than Evexx. It trades about -0.62 of its potential returns per unit of risk. Evexx is currently generating about -0.23 per unit of risk. If you would invest  8,354  in Dupont De Nemours on October 10, 2024 and sell it today you would lose (909.00) from holding Dupont De Nemours or give up 10.88% of portfolio value over 90 days.

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

Dupont De Nemours  vs.  Evexx

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Evexx

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evexx are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Evexx showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Evexx

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

The idea behind Dupont De Nemours and Evexx 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.