Correlation Between Crown Electrokinetics and Dupont De

Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and Dupont De 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 Crown Electrokinetics and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Electrokinetics Corp and Dupont De Nemours, you can compare the effects of market volatilities on Crown Electrokinetics and Dupont De 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 Crown Electrokinetics with a short position of Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Dupont De.

Diversification Opportunities for Crown Electrokinetics and Dupont De

-0.86

Correlation Coefficient

Crown Electrokinetics  Dupont De

Pay attention - limited upside

The 3 months correlation between Crown and Dupont is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Dupont De go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and Dupont De

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Dupont De. In addition to that, Crown Electrokinetics is 6.06 times more volatile than Dupont De Nemours. It trades about -0.13 of its total potential returns per unit of risk. Dupont De Nemours is currently generating about -0.11 per unit of volatility. If you would invest  7,594  in Dupont De Nemours on January 25, 2024 and sell it today you would lose (198.00) from holding Dupont De Nemours or give up 2.61% of portfolio value over 90 days.

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

Crown Electrokinetics Corp  vs.  Dupont De Nemours

Crown Electrokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Electrokinetics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dupont De Nemours

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Electrokinetics and Dupont De

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

The idea behind Crown Electrokinetics Corp and Dupont De Nemours 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.