Correlation Between Xenetic Biosciences and Dupont De

Can any of the company-specific risk be diversified away by investing in both Xenetic Biosciences and Dupont De 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 Xenetic Biosciences and Dupont De into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xenetic Biosciences and Dupont De Nemours, you can compare the effects of market volatilities on Xenetic Biosciences and Dupont De 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 Xenetic Biosciences with a short position of Dupont De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xenetic Biosciences and Dupont De.

Diversification Opportunities for Xenetic Biosciences and Dupont De

0.32

Correlation Coefficient

Xenetic Biosciences  Dupont De

Weak diversification

The 3 months correlation between Xenetic and Dupont is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Xenetic Biosciences and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours and Xenetic Biosciences 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 Xenetic Biosciences are associated (or correlated) with Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of Xenetic Biosciences i.e., Xenetic Biosciences and Dupont De go up and down completely randomly.

Pair Corralation between Xenetic Biosciences and Dupont De

Given the investment horizon of 90 days Xenetic Biosciences is expected to generate 3.12 times more return on investment than Dupont De. However, Xenetic Biosciences is 3.12 times more volatile than Dupont De Nemours. It trades about 0.02 of its potential returns per unit of risk. Dupont De Nemours is currently generating about 0.04 per unit of risk. If you would invest  410.00  in Xenetic Biosciences on July 26, 2024 and sell it today you would lose (50.00) from holding Xenetic Biosciences or give up 12.2% of portfolio value over 90 days.

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

Xenetic Biosciences  vs.  Dupont De Nemours

Xenetic Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xenetic Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Dupont De Nemours

Risk-Adjusted Performance

5 of 100

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 sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Xenetic Biosciences and Dupont De

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

The idea behind Xenetic Biosciences and Dupont De Nemours 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..