Correlation Between Dupont De and FIRST MUTUAL

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

Diversification Opportunities for Dupont De and FIRST MUTUAL

-0.88

Correlation Coefficient

Dupont De  FIRST MUTUAL

Pay attention - limited upside

The 3 months correlation between Dupont and FIRST is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FIRST MUTUAL PROPERTIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST MUTUAL PROPERTIES 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 FIRST MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST MUTUAL PROPERTIES has no effect on the direction of Dupont De i.e., Dupont De and FIRST MUTUAL go up and down completely randomly.

Pair Corralation between Dupont De and FIRST MUTUAL

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 2.19 times more return on investment than FIRST MUTUAL. However, Dupont De is 2.19 times more volatile than FIRST MUTUAL PROPERTIES. It trades about 0.01 of its potential returns per unit of risk. FIRST MUTUAL PROPERTIES is currently generating about -0.16 per unit of risk. If you would invest  7,724  in Dupont De Nemours on October 27, 2024 and sell it today you would earn a total of  12.00  from holding Dupont De Nemours or generate 0.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Dupont De Nemours  vs.  FIRST MUTUAL PROPERTIES

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.

FIRST MUTUAL PROPERTIES

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST MUTUAL PROPERTIES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, FIRST MUTUAL demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and FIRST MUTUAL

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

The idea behind Dupont De Nemours and FIRST MUTUAL PROPERTIES 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.