Correlation Between Dupont De and LHA Market
Can any of the company-specific risk be diversified away by investing in both Dupont De and LHA Market 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 LHA Market 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 LHA Market State, you can compare the effects of market volatilities on Dupont De and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LHA Market.
Diversification Opportunities for Dupont De and LHA Market
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dupont and LHA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Dupont De i.e., Dupont De and LHA Market go up and down completely randomly.
Pair Corralation between Dupont De and LHA Market
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 2.25 times more return on investment than LHA Market. However, Dupont De is 2.25 times more volatile than LHA Market State. It trades about 0.02 of its potential returns per unit of risk. LHA Market State is currently generating about -0.09 per unit of risk. If you would invest 8,179 in Dupont De Nemours on August 29, 2024 and sell it today you would earn a total of 211.00 from holding Dupont De Nemours or generate 2.58% 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. LHA Market State
Performance |
| Timeline |
| Dupont De Nemours |
| LHA Market State |
Dupont De and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and LHA Market
The main advantage of trading using opposite Dupont De and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Dupont De vs. Direxion Daily FTSE | Dupont De vs. Collegium Pharmaceutical | Dupont De vs. KKR Co LP | Dupont De vs. iShares Dividend and |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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