Correlation Between Dupont De and Fortuna Silver

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

Diversification Opportunities for Dupont De and Fortuna Silver

-0.65

Correlation Coefficient

Dupont De  Fortuna Silver

Excellent diversification

The 3 months correlation between Dupont and Fortuna is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines 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 Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Dupont De i.e., Dupont De and Fortuna Silver go up and down completely randomly.

Pair Corralation between Dupont De and Fortuna Silver

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Fortuna Silver. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.18 times less risky than Fortuna Silver. The stock trades about -0.04 of its potential returns per unit of risk. The Fortuna Silver Mines is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Fortuna Silver Mines on February 3, 2025 and sell it today you would earn a total of  78.00  from holding Fortuna Silver Mines or generate 15.15% return on investment over 90 days.

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

Dupont De Nemours  vs.  Fortuna Silver Mines

Dupont De Nemours

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Fortuna Silver Mines

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fortuna Silver Mines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Fortuna Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Fortuna Silver

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

The idea behind Dupont De Nemours and Fortuna Silver Mines 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.