Correlation Between Dundee Corp and Bunge

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

By analyzing existing cross correlation between Dundee Corp and Bunge Limited, you can compare the effects of market volatilities on Dundee Corp and Bunge 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 Dundee Corp with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dundee Corp and Bunge.

Diversification Opportunities for Dundee Corp and Bunge

-0.54

Correlation Coefficient

Dundee Corp  Bunge

Excellent diversification

The 3 months correlation between Dundee and Bunge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dundee Corp and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and Dundee Corp 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 Dundee Corp are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of Dundee Corp i.e., Dundee Corp and Bunge go up and down completely randomly.

Pair Corralation between Dundee Corp and Bunge

Assuming the 90 days horizon Dundee Corp is expected to generate 2.16 times more return on investment than Bunge. However, Dundee Corp is 2.16 times more volatile than Bunge Limited. It trades about 0.03 of its potential returns per unit of risk. Bunge Limited is currently generating about -0.16 per unit of risk. If you would invest  106.00  in Dundee Corp on September 17, 2024 and sell it today you would earn a total of  4.00  from holding Dundee Corp or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Dundee Corp  vs.  Bunge Limited

Dundee Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dundee Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward-looking indicators, Dundee Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bunge Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bunge Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Dundee Corp and Bunge

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

The idea behind Dundee Corp and Bunge Limited 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.