Correlation Between Dupont De and Lifecare
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lifecare 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 Lifecare 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 Lifecare AS, you can compare the effects of market volatilities on Dupont De and Lifecare 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 Lifecare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lifecare.
Diversification Opportunities for Dupont De and Lifecare
Significant diversification
The 3 months correlation between Dupont and Lifecare is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lifecare AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecare 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 Lifecare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecare AS has no effect on the direction of Dupont De i.e., Dupont De and Lifecare go up and down completely randomly.
Pair Corralation between Dupont De and Lifecare
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.28 times less return on investment than Lifecare. But when comparing it to its historical volatility, Dupont De Nemours is 4.24 times less risky than Lifecare. It trades about 0.04 of its potential returns per unit of risk. Lifecare AS is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,165 in Lifecare AS on August 31, 2024 and sell it today you would lose (715.00) from holding Lifecare AS or give up 33.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Dupont De Nemours vs. Lifecare AS
Performance |
| Timeline |
| Dupont De Nemours |
| Lifecare AS |
Dupont De and Lifecare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lifecare
The main advantage of trading using opposite Dupont De and Lifecare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lifecare 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 Lifecare will offset losses from the drop in Lifecare's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Linde plc Ordinary | Dupont De vs. Ecolab Inc | Dupont De vs. Sherwin Williams Co |
| Lifecare vs. Bergenbio ASA | Lifecare vs. SoftOx Solutions AS | Lifecare vs. Aega ASA | Lifecare vs. Saga Pure ASA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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