Correlation Between Dupont De and CI Signature

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

Diversification Opportunities for Dupont De and CI Signature

0.09

Correlation Coefficient

Dupont De  CI Signature

Significant diversification

The 3 months correlation between Dupont and 0P0001AAKP is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and CI Signature Cat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Signature Cat 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 CI Signature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Signature Cat has no effect on the direction of Dupont De i.e., Dupont De and CI Signature go up and down completely randomly.

Pair Corralation between Dupont De and CI Signature

Allowing for the 90-day total investment horizon Dupont De is expected to generate 13.66 times less return on investment than CI Signature. In addition to that, Dupont De is 1.01 times more volatile than CI Signature Cat. It trades about 0.02 of its total potential returns per unit of risk. CI Signature Cat is currently generating about 0.25 per unit of volatility. If you would invest  3,388  in CI Signature Cat on August 31, 2024 and sell it today you would earn a total of  287.00  from holding CI Signature Cat or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Dupont De Nemours  vs.  CI Signature Cat

Dupont De Nemours

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 2 (%) 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.

CI Signature Cat

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Signature Cat are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CI Signature sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and CI Signature

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

The idea behind Dupont De Nemours and CI Signature Cat 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.