Correlation Between Dupont De and Storytel

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

Diversification Opportunities for Dupont De and Storytel

0.68

Correlation Coefficient

Dupont De  Storytel

Poor diversification

The 3 months correlation between Dupont and Storytel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Storytel AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storytel AB 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 Storytel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storytel AB has no effect on the direction of Dupont De i.e., Dupont De and Storytel go up and down completely randomly.

Pair Corralation between Dupont De and Storytel

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Storytel. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.77 times less risky than Storytel. The stock trades about -0.01 of its potential returns per unit of risk. The Storytel AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,880  in Storytel AB on December 30, 2024 and sell it today you would earn a total of  2,510  from holding Storytel AB or generate 36.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Dupont De Nemours  vs.  Storytel AB

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.

Storytel AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Storytel AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Storytel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Storytel

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

The idea behind Dupont De Nemours and Storytel AB 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 Stocks Directory module to find actively traded stocks across global markets.