Correlation Between Dupont De and IShares AEX

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

Diversification Opportunities for Dupont De and IShares AEX

0.73

Correlation Coefficient

Dupont De  IShares AEX

Poor diversification

The 3 months correlation between Dupont and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and iShares AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AEX UCITS 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 IShares AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AEX UCITS has no effect on the direction of Dupont De i.e., Dupont De and IShares AEX go up and down completely randomly.

Pair Corralation between Dupont De and IShares AEX

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the IShares AEX. In addition to that, Dupont De is 2.31 times more volatile than iShares AEX UCITS. It trades about -0.01 of its total potential returns per unit of risk. iShares AEX UCITS is currently generating about 0.09 per unit of volatility. If you would invest  8,698  in iShares AEX UCITS on December 29, 2024 and sell it today you would earn a total of  349.00  from holding iShares AEX UCITS or generate 4.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.85%
Values	Daily Returns

Dupont De Nemours  vs.  iShares AEX UCITS

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares AEX UCITS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares AEX UCITS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares AEX is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dupont De and IShares AEX

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

The idea behind Dupont De Nemours and iShares AEX UCITS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.