Correlation Between MetLife and Dupont De

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

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

Diversification Opportunities for MetLife and Dupont De

0.46

Correlation Coefficient

MetLife  Dupont De

Very weak diversification

The 3 months correlation between MetLife and Dupont is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MetLife and Dupont De Nemours in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dupont De Nemours and MetLife 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 MetLife are associated (or correlated) with Dupont De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dupont De Nemours has no effect on the direction of MetLife i.e., MetLife and Dupont De go up and down completely randomly.

Pair Corralation between MetLife and Dupont De

Considering the 90-day investment horizon MetLife is expected to generate 1.19 times more return on investment than Dupont De. However, MetLife is 1.19 times more volatile than Dupont De Nemours. It trades about 0.13 of its potential returns per unit of risk. Dupont De Nemours is currently generating about 0.04 per unit of risk. If you would invest  7,698  in MetLife on September 4, 2024 and sell it today you would earn a total of  990.00  from holding MetLife or generate 12.86% return on investment over 90 days.

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

MetLife  vs.  Dupont De Nemours

MetLife

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, MetLife unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with MetLife and Dupont De

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

The idea behind MetLife and Dupont De Nemours 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.