Correlation Between Dupont De and Simt High

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

Diversification Opportunities for Dupont De and Simt High

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Dupont and Simt is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Simt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt High Yield 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 Simt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt High Yield has no effect on the direction of Dupont De i.e., Dupont De and Simt High go up and down completely randomly.

Pair Corralation between Dupont De and Simt High

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 8.54 times more return on investment than Simt High. However, Dupont De is 8.54 times more volatile than Simt High Yield. It trades about 0.16 of its potential returns per unit of risk. Simt High Yield is currently generating about 0.34 per unit of risk. If you would invest  6,530  in Dupont De Nemours on April 25, 2025 and sell it today you would earn a total of  1,128  from holding Dupont De Nemours or generate 17.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Dupont De Nemours  vs.  Simt High Yield

 Performance 
       Timeline  
Dupont De Nemours 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.
Simt High Yield 

Risk-Adjusted Performance

Strong

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Simt High Yield are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dupont De and Simt High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont De and Simt High

The main advantage of trading using opposite Dupont De and Simt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Simt High 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 Simt High will offset losses from the drop in Simt High's long position.
The idea behind Dupont De Nemours and Simt High Yield 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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