Correlation Between Dupont De and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Dupont De and Hang Lung 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 Hang Lung 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 Hang Lung Properties, you can compare the effects of market volatilities on Dupont De and Hang Lung 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 Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Hang Lung.
Diversification Opportunities for Dupont De and Hang Lung
Poor diversification
The 3 months correlation between Dupont and Hang is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Hang Lung Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Properties 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 Hang Lung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Lung Properties has no effect on the direction of Dupont De i.e., Dupont De and Hang Lung go up and down completely randomly.
Pair Corralation between Dupont De and Hang Lung
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.73 times more return on investment than Hang Lung. However, Dupont De Nemours is 1.37 times less risky than Hang Lung. It trades about 0.01 of its potential returns per unit of risk. Hang Lung Properties is currently generating about -0.18 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 29, 2024 and sell it today you would lose (7.00) from holding Dupont De Nemours or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Hang Lung Properties
Performance |
| Timeline |
| Dupont De Nemours |
| Hang Lung Properties |
Dupont De and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Hang Lung
The main advantage of trading using opposite Dupont De and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Hang Lung 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 Hang Lung will offset losses from the drop in Hang Lung's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Hang Lung vs. Ascendas India Trust | Hang Lung vs. Asia Pptys | Hang Lung vs. Adler Group SA | Hang Lung vs. Aztec Land Comb |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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