Correlation Between Dupont De and Kellton Tech

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

Diversification Opportunities for Dupont De and Kellton Tech

-0.34

Correlation Coefficient

Dupont De  Kellton Tech

Very good diversification

The 3 months correlation between Dupont and Kellton is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Kellton Tech Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellton Tech Solutions 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 Kellton Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellton Tech Solutions has no effect on the direction of Dupont De i.e., Dupont De and Kellton Tech go up and down completely randomly.

Pair Corralation between Dupont De and Kellton Tech

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Kellton Tech. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 3.21 times less risky than Kellton Tech. The stock trades about -0.1 of its potential returns per unit of risk. The Kellton Tech Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  14,007  in Kellton Tech Solutions on October 23, 2024 and sell it today you would earn a total of  1,355  from holding Kellton Tech Solutions or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Dupont De Nemours  vs.  Kellton Tech Solutions

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.

Kellton Tech Solutions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kellton Tech Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Kellton Tech displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Kellton Tech

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

The idea behind Dupont De Nemours and Kellton Tech Solutions 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.