Correlation Between Dupont De and First Trust/confluence

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

Diversification Opportunities for Dupont De and First Trust/confluence

0.72

Correlation Coefficient

Dupont De  First Trust/confluence

Poor diversification

The 3 months correlation between Dupont and First is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and First Trustconfluence Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust/confluence 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 First Trust/confluence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust/confluence has no effect on the direction of Dupont De i.e., Dupont De and First Trust/confluence go up and down completely randomly.

Pair Corralation between Dupont De and First Trust/confluence

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.28 times more return on investment than First Trust/confluence. However, Dupont De is 1.28 times more volatile than First Trustconfluence Small. It trades about 0.08 of its potential returns per unit of risk. First Trustconfluence Small is currently generating about 0.01 per unit of risk. If you would invest  6,851  in Dupont De Nemours on May 17, 2025 and sell it today you would earn a total of  511.00  from holding Dupont De Nemours or generate 7.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Dupont De Nemours  vs.  First Trustconfluence Small

Dupont De Nemours

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Dupont De may actually be approaching a critical reversion point that can send shares even higher in September 2025.

First Trust/confluence

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trustconfluence Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, First Trust/confluence 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 First Trust/confluence

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

The idea behind Dupont De Nemours and First Trustconfluence Small 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.