Correlation Between Dupont De and LG Display
Can any of the company-specific risk be diversified away by investing in both Dupont De and LG Display 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 LG Display 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 LG Display Co, you can compare the effects of market volatilities on Dupont De and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LG Display.
Diversification Opportunities for Dupont De and LG Display
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dupont and 034220 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Dupont De i.e., Dupont De and LG Display go up and down completely randomly.
Pair Corralation between Dupont De and LG Display
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.03 times more return on investment than LG Display. However, Dupont De is 1.03 times more volatile than LG Display Co. It trades about 0.03 of its potential returns per unit of risk. LG Display Co is currently generating about -0.33 per unit of risk. If you would invest 8,299 in Dupont De Nemours on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Dupont De Nemours or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. LG Display Co
Performance |
| Timeline |
| Dupont De Nemours |
| LG Display |
Dupont De and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and LG Display
The main advantage of trading using opposite Dupont De and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| LG Display vs. AptaBio Therapeutics | LG Display vs. Daewoo SBI SPAC | LG Display vs. Dream Security co | LG Display vs. Microfriend |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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