Correlation Between Dupont De and HelloFresh

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

Diversification Opportunities for Dupont De and HelloFresh

-0.26

Correlation Coefficient

Dupont De  HelloFresh

Very good diversification

The 3 months correlation between Dupont and HelloFresh is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE 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 HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of Dupont De i.e., Dupont De and HelloFresh go up and down completely randomly.

Pair Corralation between Dupont De and HelloFresh

Allowing for the 90-day total investment horizon Dupont De is expected to generate 16.3 times less return on investment than HelloFresh. But when comparing it to its historical volatility, Dupont De Nemours is 5.01 times less risky than HelloFresh. It trades about 0.04 of its potential returns per unit of risk. HelloFresh SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  832.00  in HelloFresh SE on September 12, 2024 and sell it today you would earn a total of  364.00  from holding HelloFresh SE or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dupont De Nemours  vs.  HelloFresh SE

Dupont De Nemours

Risk-Adjusted Performance

2 of 100

Insignificant

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

HelloFresh SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, HelloFresh reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and HelloFresh

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

The idea behind Dupont De Nemours and HelloFresh SE 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.