Correlation Between Dupont De and Canandaigua National

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

Diversification Opportunities for Dupont De and Canandaigua National

0.69

Correlation Coefficient

Dupont De  Canandaigua National

Poor diversification

The 3 months correlation between Dupont and Canandaigua is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Canandaigua National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canandaigua National 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 Canandaigua National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canandaigua National has no effect on the direction of Dupont De i.e., Dupont De and Canandaigua National go up and down completely randomly.

Pair Corralation between Dupont De and Canandaigua National

Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.29 times less return on investment than Canandaigua National. But when comparing it to its historical volatility, Dupont De Nemours is 2.59 times less risky than Canandaigua National. It trades about 0.03 of its potential returns per unit of risk. Canandaigua National is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22,676  in Canandaigua National on February 6, 2024 and sell it today you would lose (1,476) from holding Canandaigua National or give up 6.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.37%
Values	Daily Returns

Dupont De Nemours  vs.  Canandaigua National

Dupont De Nemours

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 15 (%) 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.

Canandaigua National

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canandaigua National are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Canandaigua National exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Canandaigua National

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

The idea behind Dupont De Nemours and Canandaigua National 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.