Correlation Between Dupont De and LBG Media
Can any of the company-specific risk be diversified away by investing in both Dupont De and LBG Media 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 LBG Media 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 LBG Media PLC, you can compare the effects of market volatilities on Dupont De and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LBG Media.
Diversification Opportunities for Dupont De and LBG Media
Modest diversification
The 3 months correlation between Dupont and LBG is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Dupont De i.e., Dupont De and LBG Media go up and down completely randomly.
Pair Corralation between Dupont De and LBG Media
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.3 times less return on investment than LBG Media. But when comparing it to its historical volatility, Dupont De Nemours is 1.57 times less risky than LBG Media. It trades about 0.03 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,300 in LBG Media PLC on August 27, 2024 and sell it today you would earn a total of 2,000 from holding LBG Media PLC or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.56% |
| Values | Daily Returns |
Dupont De Nemours vs. LBG Media PLC
Performance |
| Timeline |
| Dupont De Nemours |
| LBG Media PLC |
Dupont De and LBG Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and LBG Media
The main advantage of trading using opposite Dupont De and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| LBG Media vs. SupplyMe Capital PLC | LBG Media vs. SM Energy Co | LBG Media vs. FuelCell Energy | LBG Media vs. Grand Vision Media |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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