Correlation Between Dupont De and Infosys

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

Diversification Opportunities for Dupont De and Infosys

-0.2

Correlation Coefficient

Dupont De  Infosys

Good diversification

The 3 months correlation between Dupont and Infosys is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited 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 Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Limited has no effect on the direction of Dupont De i.e., Dupont De and Infosys go up and down completely randomly.

Pair Corralation between Dupont De and Infosys

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.03 times more return on investment than Infosys. However, Dupont De is 1.03 times more volatile than Infosys Limited. It trades about 0.01 of its potential returns per unit of risk. Infosys Limited is currently generating about -0.27 per unit of risk. If you would invest  7,625  in Dupont De Nemours on December 27, 2024 and sell it today you would earn a total of  24.00  from holding Dupont De Nemours or generate 0.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dupont De Nemours  vs.  Infosys Limited

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.

Infosys Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infosys Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dupont De and Infosys

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

The idea behind Dupont De Nemours and Infosys Limited 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.