Correlation Between Dupont De and LB Investment
Can any of the company-specific risk be diversified away by investing in both Dupont De and LB Investment 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 LB Investment 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 LB Investment, you can compare the effects of market volatilities on Dupont De and LB Investment 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 LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LB Investment.
Diversification Opportunities for Dupont De and LB Investment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and 309960 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment 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 LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of Dupont De i.e., Dupont De and LB Investment go up and down completely randomly.
Pair Corralation between Dupont De and LB Investment
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.75 times more return on investment than LB Investment. However, Dupont De is 1.75 times more volatile than LB Investment. It trades about 0.03 of its potential returns per unit of risk. LB Investment is currently generating about -0.2 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. LB Investment
Performance |
| Timeline |
| Dupont De Nemours |
| LB Investment |
Dupont De and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and LB Investment
The main advantage of trading using opposite Dupont De and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| LB Investment vs. iNtRON Biotechnology | LB Investment vs. BGF Retail Co | LB Investment vs. Daishin Information Communications | LB Investment vs. Shinsegae Information Communication |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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