Correlation Between Dupont De and SoFi Social

Can any of the company-specific risk be diversified away by investing in both Dupont De and SoFi Social 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 SoFi Social 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 SoFi Social 50, you can compare the effects of market volatilities on Dupont De and SoFi Social 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 SoFi Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and SoFi Social.

Diversification Opportunities for Dupont De and SoFi Social

-0.59

Correlation Coefficient

Dupont De  SoFi Social

Excellent diversification

The 3 months correlation between Dupont and SoFi is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and SoFi Social 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Social 50 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 SoFi Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Social 50 has no effect on the direction of Dupont De i.e., Dupont De and SoFi Social go up and down completely randomly.

Pair Corralation between Dupont De and SoFi Social

Allowing for the 90-day total investment horizon Dupont De is expected to generate 4.23 times less return on investment than SoFi Social. In addition to that, Dupont De is 1.09 times more volatile than SoFi Social 50. It trades about 0.02 of its total potential returns per unit of risk. SoFi Social 50 is currently generating about 0.1 per unit of volatility. If you would invest  2,377  in SoFi Social 50 on October 25, 2024 and sell it today you would earn a total of  2,111  from holding SoFi Social 50 or generate 88.8% return on investment over 90 days.

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

Dupont De Nemours  vs.  SoFi Social 50

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.

SoFi Social 50

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SoFi Social 50 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SoFi Social reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and SoFi Social

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

The idea behind Dupont De Nemours and SoFi Social 50 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.