Correlation Between Dupont De and Lazard Capital
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lazard Capital 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 Lazard Capital 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 Lazard Capital Allocator, you can compare the effects of market volatilities on Dupont De and Lazard Capital 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 Lazard Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lazard Capital.
Diversification Opportunities for Dupont De and Lazard Capital
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and Lazard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lazard Capital Allocator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Capital Allocator 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 Lazard Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Capital Allocator has no effect on the direction of Dupont De i.e., Dupont De and Lazard Capital go up and down completely randomly.
Pair Corralation between Dupont De and Lazard Capital
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.87 times less return on investment than Lazard Capital. In addition to that, Dupont De is 2.53 times more volatile than Lazard Capital Allocator. It trades about 0.05 of its total potential returns per unit of risk. Lazard Capital Allocator is currently generating about 0.34 per unit of volatility. If you would invest 1,081 in Lazard Capital Allocator on September 2, 2024 and sell it today you would earn a total of 49.00 from holding Lazard Capital Allocator or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Lazard Capital Allocator
Performance |
| Timeline |
| Dupont De Nemours |
| Lazard Capital Allocator |
Dupont De and Lazard Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lazard Capital
The main advantage of trading using opposite Dupont De and Lazard Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lazard Capital 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 Lazard Capital will offset losses from the drop in Lazard Capital's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Lazard Capital vs. Cullen International High | Lazard Capital vs. Cullen High Dividend | Lazard Capital vs. Lazard International Equity | Lazard Capital vs. The Arbitrage Event Driven |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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