Correlation Between Dupont De and Lonza Group
Can any of the company-specific risk be diversified away by investing in both Dupont De and Lonza Group 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 Lonza Group 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 Lonza Group AG, you can compare the effects of market volatilities on Dupont De and Lonza Group 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 Lonza Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Lonza Group.
Diversification Opportunities for Dupont De and Lonza Group
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Lonza is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lonza Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonza Group AG 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 Lonza Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonza Group AG has no effect on the direction of Dupont De i.e., Dupont De and Lonza Group go up and down completely randomly.
Pair Corralation between Dupont De and Lonza Group
Allowing for the 90-day total investment horizon Dupont De is expected to generate 2.32 times less return on investment than Lonza Group. But when comparing it to its historical volatility, Dupont De Nemours is 1.27 times less risky than Lonza Group. It trades about 0.03 of its potential returns per unit of risk. Lonza Group AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,386 in Lonza Group AG on September 1, 2024 and sell it today you would earn a total of 577.00 from holding Lonza Group AG or generate 10.71% 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. Lonza Group AG
Performance |
| Timeline |
| Dupont De Nemours |
| Lonza Group AG |
Dupont De and Lonza Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Lonza Group
The main advantage of trading using opposite Dupont De and Lonza Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Lonza Group 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 Lonza Group will offset losses from the drop in Lonza Group's long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| Lonza Group vs. Revvity | Lonza Group vs. Sonic Healthcare Limited | Lonza Group vs. Personalis | Lonza Group vs. Applied DNA Sciences |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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