Correlation Between Dupont De and Flying Nickel

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

Diversification Opportunities for Dupont De and Flying Nickel

0.48

Correlation Coefficient

Dupont De  Flying Nickel

Very weak diversification

The 3 months correlation between Dupont and Flying is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Flying Nickel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flying Nickel Mining 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 Flying Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flying Nickel Mining has no effect on the direction of Dupont De i.e., Dupont De and Flying Nickel go up and down completely randomly.

Pair Corralation between Dupont De and Flying Nickel

Allowing for the 90-day total investment horizon Dupont De is expected to generate 3.6 times less return on investment than Flying Nickel. But when comparing it to its historical volatility, Dupont De Nemours is 5.76 times less risky than Flying Nickel. It trades about 0.04 of its potential returns per unit of risk. Flying Nickel Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Flying Nickel Mining on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Flying Nickel Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	44.44%
Values	Daily Returns

Dupont De Nemours  vs.  Flying Nickel Mining

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 latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Flying Nickel Mining

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Flying Nickel Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Flying Nickel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dupont De and Flying Nickel

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

The idea behind Dupont De Nemours and Flying Nickel Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.