Correlation Between Dupont De and CI Global

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

Diversification Opportunities for Dupont De and CI Global

0.09

Correlation Coefficient

Dupont De  CI Global

Significant diversification

The 3 months correlation between Dupont and CIG18006 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and CI Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Global Alpha 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Global Alpha has no effect on the direction of Dupont De i.e., Dupont De and CI Global go up and down completely randomly.

Pair Corralation between Dupont De and CI Global

Allowing for the 90-day total investment horizon Dupont De is expected to generate 8.04 times less return on investment than CI Global. In addition to that, Dupont De is 1.04 times more volatile than CI Global Alpha. It trades about 0.03 of its total potential returns per unit of risk. CI Global Alpha is currently generating about 0.27 per unit of volatility. If you would invest  8,415  in CI Global Alpha on August 31, 2024 and sell it today you would earn a total of  1,965  from holding CI Global Alpha or generate 23.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Dupont De Nemours  vs.  CI Global Alpha

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 Global Alpha

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Global Alpha are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, CI Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and CI Global

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

The idea behind Dupont De Nemours and CI Global Alpha 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.