Correlation Between Dupont De and Atea ASA

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

Diversification Opportunities for Dupont De and Atea ASA

-0.67

Correlation Coefficient

Dupont De  Atea ASA

Excellent diversification

The 3 months correlation between Dupont and Atea is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA 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 Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Dupont De i.e., Dupont De and Atea ASA go up and down completely randomly.

Pair Corralation between Dupont De and Atea ASA

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Atea ASA. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.03 times less risky than Atea ASA. The stock trades about -0.59 of its potential returns per unit of risk. The Atea ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,198  in Atea ASA on October 10, 2024 and sell it today you would earn a total of  10.00  from holding Atea ASA or generate 0.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Dupont De Nemours  vs.  Atea ASA

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Atea ASA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atea ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Atea ASA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Atea ASA

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

The idea behind Dupont De Nemours and Atea ASA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.