Correlation Between Dupont De and Lectricite
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lectricite 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 Lectricite 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 lectricite de Strasbourg, you can compare the effects of market volatilities on Dupont De and Lectricite 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 Lectricite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lectricite.
Diversification Opportunities for Dupont De and Lectricite
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Lectricite is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and lectricite de Strasbourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on lectricite de Strasbourg 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 Lectricite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of lectricite de Strasbourg has no effect on the direction of Dupont De i.e., Dupont De and Lectricite go up and down completely randomly.
Pair Corralation between Dupont De and Lectricite
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.43 times less return on investment than Lectricite. In addition to that, Dupont De is 1.63 times more volatile than lectricite de Strasbourg. It trades about 0.17 of its total potential returns per unit of risk. lectricite de Strasbourg is currently generating about 0.41 per unit of volatility. If you would invest 12,650 in lectricite de Strasbourg on November 28, 2024 and sell it today you would earn a total of 1,350 from holding lectricite de Strasbourg or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dupont De Nemours vs. lectricite de Strasbourg
Performance |
| Timeline |
| Dupont De Nemours |
| lectricite de Strasbourg |
Dupont De and Lectricite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lectricite
The main advantage of trading using opposite Dupont De and Lectricite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lectricite 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 Lectricite will offset losses from the drop in Lectricite's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Lectricite vs. Thermador Groupe SA | Lectricite vs. Burelle SA | Lectricite vs. Interparfums SA | Lectricite vs. Societe LDC SA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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