Correlation Between Dupont De and Obsidian Energy

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

Diversification Opportunities for Dupont De and Obsidian Energy

0.63

Correlation Coefficient

Dupont De  Obsidian Energy

Poor diversification

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

Pair Corralation between Dupont De and Obsidian Energy

Allowing for the 90-day total investment horizon Dupont De is expected to generate 5.14 times less return on investment than Obsidian Energy. But when comparing it to its historical volatility, Dupont De Nemours is 1.74 times less risky than Obsidian Energy. It trades about 0.08 of its potential returns per unit of risk. Obsidian Energy is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  395.00  in Obsidian Energy on May 4, 2025 and sell it today you would earn a total of  195.00  from holding Obsidian Energy or generate 49.37% 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.  Obsidian Energy

Dupont De Nemours

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 5 (%) 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.

Obsidian Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Obsidian Energy are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, Obsidian Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Obsidian Energy

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

The idea behind Dupont De Nemours and Obsidian Energy 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.