Correlation Between Dupont De and Applied Digital

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

Diversification Opportunities for Dupont De and Applied Digital

0.49

Correlation Coefficient

Dupont De  Applied Digital

Very weak diversification

The 3 months correlation between Dupont and Applied is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Applied Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Digital 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 Applied Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Digital has no effect on the direction of Dupont De i.e., Dupont De and Applied Digital go up and down completely randomly.

Pair Corralation between Dupont De and Applied Digital

Allowing for the 90-day total investment horizon Dupont De is expected to generate 6.54 times less return on investment than Applied Digital. But when comparing it to its historical volatility, Dupont De Nemours is 5.11 times less risky than Applied Digital. It trades about 0.12 of its potential returns per unit of risk. Applied Digital is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  521.00  in Applied Digital on May 1, 2025 and sell it today you would earn a total of  487.00  from holding Applied Digital or generate 93.47% return on investment over 90 days.

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

Dupont De Nemours  vs.  Applied Digital

Dupont De Nemours

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 9 (%) 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.

Applied Digital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Digital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Applied Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Applied Digital

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

The idea behind Dupont De Nemours and Applied Digital 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.