Correlation Between Dupont De and Refinaria

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

Diversification Opportunities for Dupont De and Refinaria

0.41

Correlation Coefficient

Dupont De  Refinaria

Very weak diversification

The 3 months correlation between Dupont and Refinaria is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos 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 Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Dupont De i.e., Dupont De and Refinaria go up and down completely randomly.

Pair Corralation between Dupont De and Refinaria

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Refinaria. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.17 times less risky than Refinaria. The stock trades about -0.01 of its potential returns per unit of risk. The Refinaria de Petrleos is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  269.00  in Refinaria de Petrleos on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Refinaria de Petrleos or generate 8.18% return on investment over 90 days.

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

Dupont De Nemours  vs.  Refinaria de Petrleos

Dupont De Nemours

Risk-Adjusted Performance

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 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.

Refinaria de Petrleos

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Refinaria de Petrleos are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Refinaria may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dupont De and Refinaria

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

The idea behind Dupont De Nemours and Refinaria de Petrleos 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.