Correlation Between Dupont De and Lucara Diamond
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lucara Diamond 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 Lucara Diamond 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 Lucara Diamond Corp, you can compare the effects of market volatilities on Dupont De and Lucara Diamond 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 Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lucara Diamond.
Diversification Opportunities for Dupont De and Lucara Diamond
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Lucara is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp 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 Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of Dupont De i.e., Dupont De and Lucara Diamond go up and down completely randomly.
Pair Corralation between Dupont De and Lucara Diamond
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.48 times more return on investment than Lucara Diamond. However, Dupont De Nemours is 2.1 times less risky than Lucara Diamond. It trades about 0.1 of its potential returns per unit of risk. Lucara Diamond Corp is currently generating about -0.45 per unit of risk. If you would invest 7,526 in Dupont De Nemours on November 5, 2024 and sell it today you would earn a total of 154.00 from holding Dupont De Nemours or generate 2.05% 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. Lucara Diamond Corp
Performance |
| Timeline |
| Dupont De Nemours |
| Lucara Diamond Corp |
Dupont De and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lucara Diamond
The main advantage of trading using opposite Dupont De and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond's long position.| Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
| Lucara Diamond vs. Africa Oil Corp | Lucara Diamond vs. Lundin Gold | Lucara Diamond vs. Lundin Mining | Lucara Diamond vs. Inwido AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |