Correlation Between Dupont De and Compania Minera

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

Diversification Opportunities for Dupont De and Compania Minera

0.48

Correlation Coefficient

Dupont De  Compania Minera

Very weak diversification

The 3 months correlation between Dupont and Compania is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Compania Minera Poderosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Minera Poderosa 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 Compania Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Minera Poderosa has no effect on the direction of Dupont De i.e., Dupont De and Compania Minera go up and down completely randomly.

Pair Corralation between Dupont De and Compania Minera

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.96 times more return on investment than Compania Minera. However, Dupont De Nemours is 1.04 times less risky than Compania Minera. It trades about 0.01 of its potential returns per unit of risk. Compania Minera Poderosa is currently generating about 0.01 per unit of risk. If you would invest  7,724  in Dupont De Nemours on October 27, 2024 and sell it today you would earn a total of  12.00  from holding Dupont De Nemours or generate 0.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Dupont De Nemours  vs.  Compania Minera Poderosa

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.

Compania Minera Poderosa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compania Minera Poderosa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat 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 company investors.

Pair Trading with Dupont De and Compania Minera

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

The idea behind Dupont De Nemours and Compania Minera Poderosa 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.