Correlation Between Dupont De and Rabbit Holdings

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

Diversification Opportunities for Dupont De and Rabbit Holdings

-0.35

Correlation Coefficient

Dupont De  Rabbit Holdings

Very good diversification

The 3 months correlation between Dupont and Rabbit is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Rabbit Holdings PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rabbit Holdings PCL 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 Rabbit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rabbit Holdings PCL has no effect on the direction of Dupont De i.e., Dupont De and Rabbit Holdings go up and down completely randomly.

Pair Corralation between Dupont De and Rabbit Holdings

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.53 times more return on investment than Rabbit Holdings. However, Dupont De Nemours is 1.88 times less risky than Rabbit Holdings. It trades about 0.01 of its potential returns per unit of risk. Rabbit Holdings PCL is currently generating about -0.12 per unit of risk. If you would invest  7,649  in Dupont De Nemours on December 21, 2024 and sell it today you would earn a total of  44.00  from holding Dupont De Nemours or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Dupont De Nemours  vs.  Rabbit Holdings PCL

Dupont De Nemours

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Rabbit Holdings PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rabbit Holdings PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dupont De and Rabbit Holdings

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

The idea behind Dupont De Nemours and Rabbit Holdings PCL 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.