Correlation Between Dupont De and LANXESS Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Dupont De and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha 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 LANXESS Aktiengesellschaft, you can compare the effects of market volatilities on Dupont De and LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LANXESS Aktiengesellscha.
Diversification Opportunities for Dupont De and LANXESS Aktiengesellscha
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dupont and LANXESS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LANXESS Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANXESS Aktiengesellscha has no effect on the direction of Dupont De i.e., Dupont De and LANXESS Aktiengesellscha go up and down completely randomly.
Pair Corralation between Dupont De and LANXESS Aktiengesellscha
Assuming the 90 days trading horizon Dupont De is expected to generate 8.23 times less return on investment than LANXESS Aktiengesellscha. But when comparing it to its historical volatility, Dupont De Nemours is 2.06 times less risky than LANXESS Aktiengesellscha. It trades about 0.05 of its potential returns per unit of risk. LANXESS Aktiengesellschaft is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,369 in LANXESS Aktiengesellschaft on September 12, 2024 and sell it today you would earn a total of 279.00 from holding LANXESS Aktiengesellschaft or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dupont De Nemours vs. LANXESS Aktiengesellschaft
Performance |
| Timeline |
| Dupont De Nemours |
| LANXESS Aktiengesellscha |
Dupont De and LANXESS Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and LANXESS Aktiengesellscha
The main advantage of trading using opposite Dupont De and LANXESS Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LANXESS Aktiengesellscha 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 LANXESS Aktiengesellscha will offset losses from the drop in LANXESS Aktiengesellscha's long position.| Dupont De vs. TERADATA | Dupont De vs. ASSOC BR FOODS | Dupont De vs. DATAGROUP SE | Dupont De vs. Automatic Data Processing |
| LANXESS Aktiengesellscha vs. PRECISION DRILLING P | LANXESS Aktiengesellscha vs. Chuangs China Investments | LANXESS Aktiengesellscha vs. EAT WELL INVESTMENT | LANXESS Aktiengesellscha vs. BORR DRILLING NEW |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |