Correlation Between Dupont De and Air Liquide
Can any of the company-specific risk be diversified away by investing in both Dupont De and Air Liquide 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 Air Liquide 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 Air Liquide SA, you can compare the effects of market volatilities on Dupont De and Air Liquide 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 Air Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Air Liquide.
Diversification Opportunities for Dupont De and Air Liquide
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and Air is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Air Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Liquide SA 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 Air Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Liquide SA has no effect on the direction of Dupont De i.e., Dupont De and Air Liquide go up and down completely randomly.
Pair Corralation between Dupont De and Air Liquide
Assuming the 90 days trading horizon Dupont De Nemours is expected to generate 1.53 times more return on investment than Air Liquide. However, Dupont De is 1.53 times more volatile than Air Liquide SA. It trades about 0.04 of its potential returns per unit of risk. Air Liquide SA is currently generating about 0.01 per unit of risk. If you would invest 7,802 in Dupont De Nemours on September 13, 2024 and sell it today you would earn a total of 84.00 from holding Dupont De Nemours or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Air Liquide SA
Performance |
| Timeline |
| Dupont De Nemours |
| Air Liquide SA |
Dupont De and Air Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Air Liquide
The main advantage of trading using opposite Dupont De and Air Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Air Liquide 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 Air Liquide will offset losses from the drop in Air Liquide's long position.| Dupont De vs. United Rentals | Dupont De vs. Selective Insurance Group | Dupont De vs. Insurance Australia Group | Dupont De vs. Air Lease |
| Air Liquide vs. SPORTING | Air Liquide vs. USWE SPORTS AB | Air Liquide vs. Transport International Holdings | Air Liquide vs. AGNC INVESTMENT |
Check out your portfolio center.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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