Correlation Between Dupont De and ProShares UltraPro

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

Diversification Opportunities for Dupont De and ProShares UltraPro

-0.29

Correlation Coefficient

Dupont De  ProShares UltraPro

Very good diversification

The 3 months correlation between Dupont and ProShares is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and ProShares UltraPro QQQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro QQQ 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 ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro QQQ has no effect on the direction of Dupont De i.e., Dupont De and ProShares UltraPro go up and down completely randomly.

Pair Corralation between Dupont De and ProShares UltraPro

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the ProShares UltraPro. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 2.71 times less risky than ProShares UltraPro. The stock trades about -0.08 of its potential returns per unit of risk. The ProShares UltraPro QQQ is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  7,155  in ProShares UltraPro QQQ on October 23, 2024 and sell it today you would earn a total of  1,297  from holding ProShares UltraPro QQQ or generate 18.13% return on investment over 90 days.

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

Dupont De Nemours  vs.  ProShares UltraPro QQQ

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.

ProShares UltraPro QQQ

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares UltraPro QQQ are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, ProShares UltraPro reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and ProShares UltraPro

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

The idea behind Dupont De Nemours and ProShares UltraPro QQQ 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.