Correlation Between Dupont De and FNB ETN

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

Diversification Opportunities for Dupont De and FNB ETN

-0.11

Correlation Coefficient

Dupont De  FNB ETN

Good diversification

The 3 months correlation between Dupont and FNB is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and FNB ETN on in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN on 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 FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN on has no effect on the direction of Dupont De i.e., Dupont De and FNB ETN go up and down completely randomly.

Pair Corralation between Dupont De and FNB ETN

Allowing for the 90-day total investment horizon Dupont De is expected to generate 14.26 times less return on investment than FNB ETN. But when comparing it to its historical volatility, Dupont De Nemours is 3.1 times less risky than FNB ETN. It trades about 0.04 of its potential returns per unit of risk. FNB ETN on is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  160,700  in FNB ETN on on September 4, 2024 and sell it today you would earn a total of  90,700  from holding FNB ETN on or generate 56.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Dupont De Nemours  vs.  FNB ETN on

Dupont De Nemours

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 3 (%) 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.

FNB ETN on

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN on are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and FNB ETN

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

The idea behind Dupont De Nemours and FNB ETN on 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.