Correlation Between Dupont De and Hartford Healthcare

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

Diversification Opportunities for Dupont De and Hartford Healthcare

0.92

Correlation Coefficient

Dupont De  Hartford Healthcare

Almost no diversification

The 3 months correlation between Dupont and Hartford is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and The Hartford Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Healthcare 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 Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Healthcare has no effect on the direction of Dupont De i.e., Dupont De and Hartford Healthcare go up and down completely randomly.

Pair Corralation between Dupont De and Hartford Healthcare

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.8 times more return on investment than Hartford Healthcare. However, Dupont De is 1.8 times more volatile than The Hartford Healthcare. It trades about 0.02 of its potential returns per unit of risk. The Hartford Healthcare is currently generating about -0.03 per unit of risk. If you would invest  7,231  in Dupont De Nemours on October 9, 2024 and sell it today you would earn a total of  277.00  from holding Dupont De Nemours or generate 3.83% return on investment over 90 days.

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

Dupont De Nemours  vs.  The Hartford Healthcare

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.

The Hartford Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hartford Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Dupont De and Hartford Healthcare

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

The idea behind Dupont De Nemours and The Hartford Healthcare 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.