Correlation Between Dupont De and Fundo Investimento

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

Diversification Opportunities for Dupont De and Fundo Investimento

-0.45

Correlation Coefficient

Dupont De  Fundo Investimento

Very good diversification

The 3 months correlation between Dupont and Fundo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of Dupont De i.e., Dupont De and Fundo Investimento go up and down completely randomly.

Pair Corralation between Dupont De and Fundo Investimento

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.93 times more return on investment than Fundo Investimento. However, Dupont De Nemours is 1.07 times less risky than Fundo Investimento. It trades about -0.02 of its potential returns per unit of risk. Fundo Investimento Imobiliario is currently generating about -0.05 per unit of risk. If you would invest  8,372  in Dupont De Nemours on December 2, 2024 and sell it today you would lose (195.00) from holding Dupont De Nemours or give up 2.33% of portfolio value over 90 days.

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

Dupont De Nemours  vs.  Fundo Investimento Imobiliario

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.

Fundo Investimento

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fundo Investimento Imobiliario has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong essential indicators, Fundo Investimento 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 Fundo Investimento

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

The idea behind Dupont De Nemours and Fundo Investimento Imobiliario 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.