Correlation Between Danimer Scientific and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both Danimer Scientific and LyondellBasell Industries 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 Danimer Scientific and LyondellBasell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danimer Scientific and LyondellBasell Industries NV, you can compare the effects of market volatilities on Danimer Scientific and LyondellBasell Industries 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 Danimer Scientific with a short position of LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danimer Scientific and LyondellBasell Industries.
Diversification Opportunities for Danimer Scientific and LyondellBasell Industries
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Danimer and LyondellBasell is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries and Danimer Scientific 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 Danimer Scientific are associated (or correlated) with LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between Danimer Scientific and LyondellBasell Industries
Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the LyondellBasell Industries. In addition to that, Danimer Scientific is 5.11 times more volatile than LyondellBasell Industries NV. It trades about -0.05 of its total potential returns per unit of risk. LyondellBasell Industries NV is currently generating about 0.03 per unit of volatility. If you would invest 7,446 in LyondellBasell Industries NV on August 28, 2024 and sell it today you would earn a total of 960.00 from holding LyondellBasell Industries NV or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danimer Scientific vs. LyondellBasell Industries NV
Performance |
| Timeline |
| Danimer Scientific |
| LyondellBasell Industries |
Danimer Scientific and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danimer Scientific and LyondellBasell Industries
The main advantage of trading using opposite Danimer Scientific and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danimer Scientific position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.| Danimer Scientific vs. LyondellBasell Industries NV | Danimer Scientific vs. International Flavors Fragrances | Danimer Scientific vs. Cabot | Danimer Scientific vs. Westlake Chemical |
| LyondellBasell Industries vs. International Flavors Fragrances | LyondellBasell Industries vs. Cabot | LyondellBasell Industries vs. Westlake Chemical | LyondellBasell Industries vs. Air Products and |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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