Correlation Between Dupont De and Calvert Large

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

Diversification Opportunities for Dupont De and Calvert Large

0.63

Correlation Coefficient

Dupont De  Calvert Large

Poor diversification

The 3 months correlation between Dupont and Calvert is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Calvert Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Large 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 Calvert Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Large Cap has no effect on the direction of Dupont De i.e., Dupont De and Calvert Large go up and down completely randomly.

Pair Corralation between Dupont De and Calvert Large

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.88 times more return on investment than Calvert Large. However, Dupont De is 1.88 times more volatile than Calvert Large Cap. It trades about 0.22 of its potential returns per unit of risk. Calvert Large Cap is currently generating about 0.39 per unit of risk. If you would invest  5,975  in Dupont De Nemours on April 21, 2025 and sell it today you would earn a total of  1,580  from holding Dupont De Nemours or generate 26.44% return on investment over 90 days.

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

Dupont De Nemours  vs.  Calvert Large Cap

Dupont De Nemours

Risk-Adjusted Performance

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.

Calvert Large Cap

Risk-Adjusted Performance

Strong

Over the last 90 days Calvert Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Calvert Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Calvert Large

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

The idea behind Dupont De Nemours and Calvert Large 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.