Correlation Between Dupont De and Golden Grail

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

Diversification Opportunities for Dupont De and Golden Grail

0.13

Correlation Coefficient

Dupont De  Golden Grail

Average diversification

The 3 months correlation between Dupont and Golden is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Golden Grail Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Grail Technology 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 Golden Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Grail Technology has no effect on the direction of Dupont De i.e., Dupont De and Golden Grail go up and down completely randomly.

Pair Corralation between Dupont De and Golden Grail

Allowing for the 90-day total investment horizon Dupont De is expected to generate 11.23 times less return on investment than Golden Grail. But when comparing it to its historical volatility, Dupont De Nemours is 6.59 times less risky than Golden Grail. It trades about 0.01 of its potential returns per unit of risk. Golden Grail Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2.92  in Golden Grail Technology on December 25, 2024 and sell it today you would lose (0.52) from holding Golden Grail Technology or give up 17.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Dupont De Nemours  vs.  Golden Grail Technology

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.

Golden Grail Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Grail Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Golden Grail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dupont De and Golden Grail

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

The idea behind Dupont De Nemours and Golden Grail Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.