Correlation Between Dupont De and American Beacon

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

Diversification Opportunities for Dupont De and American Beacon

0.0

Correlation Coefficient

Dupont De  American Beacon

Pay attention - limited upside

The 3 months correlation between Dupont and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and American Beacon Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Mid 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Mid has no effect on the direction of Dupont De i.e., Dupont De and American Beacon go up and down completely randomly.

Pair Corralation between Dupont De and American Beacon

If you would invest (100.00) in American Beacon Mid Cap on February 1, 2024 and sell it today you would earn a total of  100.00  from holding American Beacon Mid Cap or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dupont De Nemours  vs.  American Beacon Mid Cap

Dupont De Nemours

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Dupont De exhibited solid returns over the last few months and may actually be approaching a breakup point.

American Beacon Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days American Beacon Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, American Beacon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dupont De and American Beacon

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

The idea behind Dupont De Nemours and American Beacon Mid Cap 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..