Correlation Between Dupont De and H Lundbeck
Can any of the company-specific risk be diversified away by investing in both Dupont De and H Lundbeck 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 H Lundbeck 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 H Lundbeck AS, you can compare the effects of market volatilities on Dupont De and H Lundbeck 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 H Lundbeck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and H Lundbeck.
Diversification Opportunities for Dupont De and H Lundbeck
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and HLUN-A is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and H Lundbeck AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H Lundbeck AS 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 H Lundbeck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H Lundbeck AS has no effect on the direction of Dupont De i.e., Dupont De and H Lundbeck go up and down completely randomly.
Pair Corralation between Dupont De and H Lundbeck
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.76 times more return on investment than H Lundbeck. However, Dupont De Nemours is 1.32 times less risky than H Lundbeck. It trades about 0.01 of its potential returns per unit of risk. H Lundbeck AS is currently generating about -0.05 per unit of risk. If you would invest 8,391 in Dupont De Nemours on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Dupont De Nemours or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. H Lundbeck AS
Performance |
| Timeline |
| Dupont De Nemours |
| H Lundbeck AS |
Dupont De and H Lundbeck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and H Lundbeck
The main advantage of trading using opposite Dupont De and H Lundbeck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, H Lundbeck 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 H Lundbeck will offset losses from the drop in H Lundbeck's long position.| Dupont De vs. Direxion Daily FTSE | Dupont De vs. Collegium Pharmaceutical | Dupont De vs. KKR Co LP | Dupont De vs. iShares Dividend and |
| H Lundbeck vs. H Lundbeck AS | H Lundbeck vs. GN Store Nord | H Lundbeck vs. Nordea Bank Abp | H Lundbeck vs. FLSmidth Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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