Correlation Between Dupont De and Grupo Herdez

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

Diversification Opportunities for Dupont De and Grupo Herdez

0.09

Correlation Coefficient

Dupont De  Grupo Herdez

Significant diversification

The 3 months correlation between Dupont and Grupo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez SAB 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 Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of Dupont De i.e., Dupont De and Grupo Herdez go up and down completely randomly.

Pair Corralation between Dupont De and Grupo Herdez

Allowing for the 90-day total investment horizon Dupont De is expected to generate 5.7 times less return on investment than Grupo Herdez. But when comparing it to its historical volatility, Dupont De Nemours is 1.19 times less risky than Grupo Herdez. It trades about 0.02 of its potential returns per unit of risk. Grupo Herdez SAB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,131  in Grupo Herdez SAB on December 20, 2024 and sell it today you would earn a total of  425.00  from holding Grupo Herdez SAB or generate 8.28% return on investment over 90 days.

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

Dupont De Nemours  vs.  Grupo Herdez SAB

Dupont De Nemours

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Grupo Herdez SAB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Herdez SAB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Herdez may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dupont De and Grupo Herdez

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

The idea behind Dupont De Nemours and Grupo Herdez SAB 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..