Correlation Between Dupont De and Gulfport Energy

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

Diversification Opportunities for Dupont De and Gulfport Energy

0.82

Correlation Coefficient

Dupont De  Gulfport Energy

Very poor diversification

The 3 months correlation between Dupont and Gulfport is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating 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 Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of Dupont De i.e., Dupont De and Gulfport Energy go up and down completely randomly.

Pair Corralation between Dupont De and Gulfport Energy

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.79 times more return on investment than Gulfport Energy. However, Dupont De Nemours is 1.26 times less risky than Gulfport Energy. It trades about 0.09 of its potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.03 per unit of risk. If you would invest  7,749  in Dupont De Nemours on August 3, 2024 and sell it today you would earn a total of  501.00  from holding Dupont De Nemours or generate 6.47% return on investment over 90 days.

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

Dupont De Nemours  vs.  Gulfport Energy Operating

Dupont De Nemours

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 7 (%) 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 December 2024.

Gulfport Energy Operating

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gulfport Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dupont De and Gulfport Energy

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

The idea behind Dupont De Nemours and Gulfport Energy Operating 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.