Correlation Between Dupont De and 91529YAL0

Can any of the company-specific risk be diversified away by investing in both Dupont De and 91529YAL0 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 91529YAL0 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 UNUM GROUP 3875, you can compare the effects of market volatilities on Dupont De and 91529YAL0 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 91529YAL0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and 91529YAL0.

Diversification Opportunities for Dupont De and 91529YAL0

0.75

Correlation Coefficient

Dupont De  91529YAL0

Poor diversification

The 3 months correlation between Dupont and 91529YAL0 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and UNUM GROUP 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNUM GROUP 3875 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 91529YAL0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNUM GROUP 3875 has no effect on the direction of Dupont De i.e., Dupont De and 91529YAL0 go up and down completely randomly.

Pair Corralation between Dupont De and 91529YAL0

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the 91529YAL0. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.24 times less risky than 91529YAL0. The stock trades about -0.56 of its potential returns per unit of risk. The UNUM GROUP 3875 is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest  9,882  in UNUM GROUP 3875 on October 12, 2024 and sell it today you would lose (308.00) from holding UNUM GROUP 3875 or give up 3.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	75.0%
Values	Daily Returns

Dupont De Nemours  vs.  UNUM GROUP 3875

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

UNUM GROUP 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNUM GROUP 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 91529YAL0 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 91529YAL0

The main advantage of trading using opposite Dupont De and 91529YAL0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, 91529YAL0 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 91529YAL0 will offset losses from the drop in 91529YAL0's long position.

The idea behind Dupont De Nemours and UNUM GROUP 3875 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.