Correlation Between Dupont De and Perkins Mid

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

Diversification Opportunities for Dupont De and Perkins Mid

0.57

Correlation Coefficient

Dupont De  Perkins Mid

Very weak diversification

The 3 months correlation between Dupont and Perkins is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Perkins Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Mid Cap 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 Perkins Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Mid Cap has no effect on the direction of Dupont De i.e., Dupont De and Perkins Mid go up and down completely randomly.

Pair Corralation between Dupont De and Perkins Mid

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.98 times more return on investment than Perkins Mid. However, Dupont De is 1.98 times more volatile than Perkins Mid Cap. It trades about 0.19 of its potential returns per unit of risk. Perkins Mid Cap is currently generating about 0.07 per unit of risk. If you would invest  6,964  in Dupont De Nemours on March 3, 2024 and sell it today you would earn a total of  1,252  from holding Dupont De Nemours or generate 17.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Dupont De Nemours  vs.  Perkins Mid Cap

Dupont De Nemours

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Perkins Mid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Mid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Perkins Mid 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 Perkins Mid

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

The idea behind Dupont De Nemours and Perkins Mid Cap 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.