Correlation Between Dupont De and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lyxor MSCI 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 Lyxor MSCI 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 Lyxor MSCI China, you can compare the effects of market volatilities on Dupont De and Lyxor MSCI 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 Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lyxor MSCI.
Diversification Opportunities for Dupont De and Lyxor MSCI
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dupont and Lyxor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lyxor MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI China 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 Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI China has no effect on the direction of Dupont De i.e., Dupont De and Lyxor MSCI go up and down completely randomly.
Pair Corralation between Dupont De and Lyxor MSCI
Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.14 times less return on investment than Lyxor MSCI. But when comparing it to its historical volatility, Dupont De Nemours is 1.42 times less risky than Lyxor MSCI. It trades about 0.03 of its potential returns per unit of risk. Lyxor MSCI China is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,034 in Lyxor MSCI China on September 12, 2024 and sell it today you would earn a total of 179.00 from holding Lyxor MSCI China or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.8% |
| Values | Daily Returns |
Dupont De Nemours vs. Lyxor MSCI China
Performance |
| Timeline |
| Dupont De Nemours |
| Lyxor MSCI China |
Dupont De and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lyxor MSCI
The main advantage of trading using opposite Dupont De and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lyxor MSCI 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 Lyxor MSCI will offset losses from the drop in Lyxor MSCI's long position.| Dupont De vs. Griffon | Dupont De vs. Merck Company | Dupont De vs. Brinker International | Dupont De vs. Alcoa Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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