Correlation Between Dupont De and Steward Small-mid

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

Diversification Opportunities for Dupont De and Steward Small-mid

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Dupont and Steward is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Dupont De i.e., Dupont De and Steward Small-mid go up and down completely randomly.

Pair Corralation between Dupont De and Steward Small-mid

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Steward Small-mid. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.14 times less risky than Steward Small-mid. The stock trades about -0.02 of its potential returns per unit of risk. The Steward Small Mid Cap is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,460  in Steward Small Mid Cap on September 10, 2024 and sell it today you would lose (5.00) from holding Steward Small Mid Cap or give up 0.34% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dupont De Nemours  vs.  Steward Small Mid Cap

 Performance 
       Timeline  
Dupont De Nemours 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 4 (%) 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.
Steward Small Mid 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Steward Small Mid Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Steward Small-mid showed solid returns over the last few months and may actually be approaching a breakup point.

Dupont De and Steward Small-mid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont De and Steward Small-mid

The main advantage of trading using opposite Dupont De and Steward Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Steward Small-mid 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 Steward Small-mid will offset losses from the drop in Steward Small-mid's long position.
The idea behind Dupont De Nemours and Steward Small Mid Cap 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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