Correlation Between Dupont De and Russell 2000

Can any of the company-specific risk be diversified away by investing in both Dupont De and Russell 2000 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 Russell 2000 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 Russell 2000 Fund, you can compare the effects of market volatilities on Dupont De and Russell 2000 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 Russell 2000. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Russell 2000.

Diversification Opportunities for Dupont De and Russell 2000

0.14

Correlation Coefficient

Dupont De  Russell 2000

Average diversification

The 3 months correlation between Dupont and Russell is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Russell 2000 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russell 2000 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 Russell 2000. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell 2000 has no effect on the direction of Dupont De i.e., Dupont De and Russell 2000 go up and down completely randomly.

Pair Corralation between Dupont De and Russell 2000

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.29 times more return on investment than Russell 2000. However, Dupont De is 1.29 times more volatile than Russell 2000 Fund. It trades about 0.01 of its potential returns per unit of risk. Russell 2000 Fund is currently generating about -0.11 per unit of risk. If you would invest  7,689  in Dupont De Nemours on December 20, 2024 and sell it today you would earn a total of  4.00  from holding Dupont De Nemours or generate 0.05% 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.  Russell 2000 Fund

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.

Russell 2000

Risk-Adjusted Performance

Very Weak

Over the last 90 days Russell 2000 Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dupont De and Russell 2000

The main advantage of trading using opposite Dupont De and Russell 2000 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Russell 2000 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 Russell 2000 will offset losses from the drop in Russell 2000's long position.

The idea behind Dupont De Nemours and Russell 2000 Fund 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.