Correlation Between Dupont De and Thrivent Government

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

Diversification Opportunities for Dupont De and Thrivent Government

0.25

Correlation Coefficient

Dupont De  Thrivent Government

Modest diversification

The 3 months correlation between Dupont and Thrivent is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Thrivent Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Government Bond 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 Thrivent Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Government Bond has no effect on the direction of Dupont De i.e., Dupont De and Thrivent Government go up and down completely randomly.

Pair Corralation between Dupont De and Thrivent Government

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Thrivent Government. In addition to that, Dupont De is 5.24 times more volatile than Thrivent Government Bond. It trades about -0.01 of its total potential returns per unit of risk. Thrivent Government Bond is currently generating about 0.13 per unit of volatility. If you would invest  860.00  in Thrivent Government Bond on December 29, 2024 and sell it today you would earn a total of  21.00  from holding Thrivent Government Bond or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Dupont De Nemours  vs.  Thrivent Government Bond

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Thrivent Government Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Government Bond are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Thrivent Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dupont De and Thrivent Government

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

The idea behind Dupont De Nemours and Thrivent Government Bond 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.