Correlation Between Dupont De and Live Oak
Can any of the company-specific risk be diversified away by investing in both Dupont De and Live Oak 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 Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on Dupont De and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Live Oak.
Diversification Opportunities for Dupont De and Live Oak
Very good diversification
The 3 months correlation between Dupont and LIVE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Dupont De i.e., Dupont De and Live Oak go up and down completely randomly.
Pair Corralation between Dupont De and Live Oak
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.79 times less return on investment than Live Oak. In addition to that, Dupont De is 1.62 times more volatile than Live Oak Health. It trades about 0.03 of its total potential returns per unit of risk. Live Oak Health is currently generating about 0.07 per unit of volatility. If you would invest 2,166 in Live Oak Health on August 28, 2024 and sell it today you would earn a total of 32.00 from holding Live Oak Health or generate 1.48% 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. Live Oak Health
Performance |
| Timeline |
| Dupont De Nemours |
| Live Oak Health |
Dupont De and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Live Oak
The main advantage of trading using opposite Dupont De and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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