Correlation Between Dupont De and La Comer

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

Diversification Opportunities for Dupont De and La Comer

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Dupont and LACOMERUBC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and La Comer SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Comer SAB 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 La Comer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Comer SAB has no effect on the direction of Dupont De i.e., Dupont De and La Comer go up and down completely randomly.

Pair Corralation between Dupont De and La Comer

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.59 times more return on investment than La Comer. However, Dupont De Nemours is 1.7 times less risky than La Comer. It trades about 0.04 of its potential returns per unit of risk. La Comer SAB is currently generating about -0.14 per unit of risk. If you would invest  7,685  in Dupont De Nemours on October 20, 2024 and sell it today you would earn a total of  62.00  from holding Dupont De Nemours or generate 0.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Dupont De Nemours  vs.  La Comer SAB

 Performance 
       Timeline  
Dupont De Nemours 

Risk-Adjusted Performance

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Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
La Comer SAB 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days La Comer SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Dupont De and La Comer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont De and La Comer

The main advantage of trading using opposite Dupont De and La Comer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, La Comer 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 La Comer will offset losses from the drop in La Comer's long position.
The idea behind Dupont De Nemours and La Comer SAB 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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