Correlation Between Dupont De and Huazhu
Can any of the company-specific risk be diversified away by investing in both Dupont De and Huazhu 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 Huazhu 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 Huazhu Group, you can compare the effects of market volatilities on Dupont De and Huazhu 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 Huazhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Huazhu.
Diversification Opportunities for Dupont De and Huazhu
Poor diversification
The 3 months correlation between Dupont and Huazhu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Huazhu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huazhu Group 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 Huazhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huazhu Group has no effect on the direction of Dupont De i.e., Dupont De and Huazhu go up and down completely randomly.
Pair Corralation between Dupont De and Huazhu
Allowing for the 90-day total investment horizon Dupont De is expected to generate 43.63 times less return on investment than Huazhu. But when comparing it to its historical volatility, Dupont De Nemours is 2.37 times less risky than Huazhu. It trades about 0.0 of its potential returns per unit of risk. Huazhu Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,044 in Huazhu Group on August 30, 2024 and sell it today you would earn a total of 159.00 from holding Huazhu Group or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Huazhu Group
Performance |
| Timeline |
| Dupont De Nemours |
| Huazhu Group |
Dupont De and Huazhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Huazhu
The main advantage of trading using opposite Dupont De and Huazhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Huazhu 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 Huazhu will offset losses from the drop in Huazhu's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Air Products and | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc |
| Huazhu vs. GreenTree Hospitality Group | Huazhu vs. Soho House Co | Huazhu vs. InterContinental Hotels Group | Huazhu vs. The Intergroup |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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