Correlation Between Dupont De and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lungyen Life 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 Lungyen Life 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 Lungyen Life Service, you can compare the effects of market volatilities on Dupont De and Lungyen Life 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 Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lungyen Life.
Diversification Opportunities for Dupont De and Lungyen Life
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dupont and Lungyen is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service 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 Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of Dupont De i.e., Dupont De and Lungyen Life go up and down completely randomly.
Pair Corralation between Dupont De and Lungyen Life
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Lungyen Life. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.44 times less risky than Lungyen Life. The stock trades about -0.57 of its potential returns per unit of risk. The Lungyen Life Service is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 5,580 in Lungyen Life Service on October 14, 2024 and sell it today you would lose (300.00) from holding Lungyen Life Service or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dupont De Nemours vs. Lungyen Life Service
Performance |
| Timeline |
| Dupont De Nemours |
| Lungyen Life Service |
Dupont De and Lungyen Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lungyen Life
The main advantage of trading using opposite Dupont De and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Lungyen Life vs. Da Lue International | Lungyen Life vs. Foxconn Technology Co | Lungyen Life vs. Fubon Financial Holding | Lungyen Life vs. YuantaP shares Taiwan Top |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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