Correlation Between Dupont De and Powszechna Kasa

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

Diversification Opportunities for Dupont De and Powszechna Kasa

0.01

Correlation Coefficient

Dupont De  Powszechna Kasa

Significant diversification

The 3 months correlation between Dupont and Powszechna is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Powszechna Kasa Oszczednosci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechna Kasa Oszc 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 Powszechna Kasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechna Kasa Oszc has no effect on the direction of Dupont De i.e., Dupont De and Powszechna Kasa go up and down completely randomly.

Pair Corralation between Dupont De and Powszechna Kasa

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Powszechna Kasa. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 5.03 times less risky than Powszechna Kasa. The stock trades about -0.15 of its potential returns per unit of risk. The Powszechna Kasa Oszczednosci is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,401  in Powszechna Kasa Oszczednosci on October 8, 2024 and sell it today you would earn a total of  49.00  from holding Powszechna Kasa Oszczednosci or generate 3.5% return on investment over 90 days.

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

Dupont De Nemours  vs.  Powszechna Kasa Oszczednosci

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.

Powszechna Kasa Oszc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Powszechna Kasa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Powszechna Kasa

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

The idea behind Dupont De Nemours and Powszechna Kasa Oszczednosci 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.