Correlation Between Dupont De and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lululemon Athletica 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 Lululemon Athletica 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 Lululemon Athletica, you can compare the effects of market volatilities on Dupont De and Lululemon Athletica 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 Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lululemon Athletica.
Diversification Opportunities for Dupont De and Lululemon Athletica
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dupont and Lululemon is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica 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 Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of Dupont De i.e., Dupont De and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Dupont De and Lululemon Athletica
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.45 times more return on investment than Lululemon Athletica. However, Dupont De Nemours is 2.24 times less risky than Lululemon Athletica. It trades about 0.1 of its potential returns per unit of risk. Lululemon Athletica is currently generating about -0.02 per unit of risk. If you would invest 7,688 in Dupont De Nemours on October 23, 2024 and sell it today you would earn a total of 158.00 from holding Dupont De Nemours or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Dupont De Nemours vs. Lululemon Athletica
Performance |
| Timeline |
| Dupont De Nemours |
| Lululemon Athletica |
Dupont De and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lululemon Athletica
The main advantage of trading using opposite Dupont De and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Lululemon Athletica vs. DETALION GAMES SA | Lululemon Athletica vs. Penn National Gaming | Lululemon Athletica vs. Boyd Gaming | Lululemon Athletica vs. PENN NATL GAMING |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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