Correlation Between Dupont De and LG Clean
Can any of the company-specific risk be diversified away by investing in both Dupont De and LG Clean 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 LG Clean 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 LG Clean Water, you can compare the effects of market volatilities on Dupont De and LG Clean 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 LG Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LG Clean.
Diversification Opportunities for Dupont De and LG Clean
Very weak diversification
The 3 months correlation between Dupont and GLUG is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LG Clean Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Clean Water 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 LG Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Clean Water has no effect on the direction of Dupont De i.e., Dupont De and LG Clean go up and down completely randomly.
Pair Corralation between Dupont De and LG Clean
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.81 times more return on investment than LG Clean. However, Dupont De is 1.81 times more volatile than LG Clean Water. It trades about -0.02 of its potential returns per unit of risk. LG Clean Water is currently generating about -0.04 per unit of risk. If you would invest 8,372 in Dupont De Nemours on December 2, 2024 and sell it today you would lose (195.00) from holding Dupont De Nemours or give up 2.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Dupont De Nemours vs. LG Clean Water
Performance |
Timeline |
Dupont De Nemours |
LG Clean Water |
Dupont De and LG Clean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dupont De and LG Clean
The main advantage of trading using opposite Dupont De and LG Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LG Clean 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 LG Clean will offset losses from the drop in LG Clean's long position.Dupont De vs. Eastman Chemical | Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide |
LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. Amundi MSCI Semiconductors | LG Clean vs. VanEck Solana ETN |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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