Correlation Between Dupont De and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both Dupont De and Ganfeng Lithium 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 Ganfeng Lithium 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 Ganfeng Lithium Co, you can compare the effects of market volatilities on Dupont De and Ganfeng Lithium 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 Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Ganfeng Lithium.
Diversification Opportunities for Dupont De and Ganfeng Lithium
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dupont and Ganfeng is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium 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 Ganfeng Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganfeng Lithium has no effect on the direction of Dupont De i.e., Dupont De and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between Dupont De and Ganfeng Lithium
Allowing for the 90-day total investment horizon Dupont De is expected to generate 16.61 times less return on investment than Ganfeng Lithium. But when comparing it to its historical volatility, Dupont De Nemours is 2.91 times less risky than Ganfeng Lithium. It trades about 0.03 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Ganfeng Lithium Co on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Ganfeng Lithium Co or generate 15.81% 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. Ganfeng Lithium Co
Performance |
| Timeline |
| Dupont De Nemours |
| Ganfeng Lithium |
Dupont De and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Ganfeng Lithium
The main advantage of trading using opposite Dupont De and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Ganfeng Lithium 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 Ganfeng Lithium will offset losses from the drop in Ganfeng Lithium's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Ganfeng Lithium vs. BASF SE NA | Ganfeng Lithium vs. Braskem SA Class | Ganfeng Lithium vs. Lsb Industries | Ganfeng Lithium vs. Dow Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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