Correlation Between Dupont De and Martin Currie

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

Diversification Opportunities for Dupont De and Martin Currie

0.81

Correlation Coefficient

Dupont De  Martin Currie

Very poor diversification

The 3 months correlation between Dupont and Martin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Martin Currie Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Currie Emerging 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 Martin Currie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Currie Emerging has no effect on the direction of Dupont De i.e., Dupont De and Martin Currie go up and down completely randomly.

Pair Corralation between Dupont De and Martin Currie

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Martin Currie. In addition to that, Dupont De is 1.04 times more volatile than Martin Currie Emerging. It trades about -0.26 of its total potential returns per unit of risk. Martin Currie Emerging is currently generating about -0.04 per unit of volatility. If you would invest  1,250  in Martin Currie Emerging on January 31, 2024 and sell it today you would lose (12.00) from holding Martin Currie Emerging or give up 0.96% of portfolio value over 90 days.

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

Dupont De Nemours  vs.  Martin Currie Emerging

Dupont De Nemours

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 17 (%) 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.

Martin Currie Emerging

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Currie Emerging are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Martin Currie may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Dupont De and Martin Currie

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

The idea behind Dupont De Nemours and Martin Currie Emerging 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.