Correlation Between Dupont De and Hargreaves Lansdown

Can any of the company-specific risk be diversified away by investing in both Dupont De and Hargreaves Lansdown 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 Hargreaves Lansdown 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 Hargreaves Lansdown plc, you can compare the effects of market volatilities on Dupont De and Hargreaves Lansdown 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 Hargreaves Lansdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Hargreaves Lansdown.

Diversification Opportunities for Dupont De and Hargreaves Lansdown

0.3

Correlation Coefficient

Dupont De  Hargreaves Lansdown

Weak diversification

The 3 months correlation between Dupont and Hargreaves is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Hargreaves Lansdown plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hargreaves Lansdown plc 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 Hargreaves Lansdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hargreaves Lansdown plc has no effect on the direction of Dupont De i.e., Dupont De and Hargreaves Lansdown go up and down completely randomly.

Pair Corralation between Dupont De and Hargreaves Lansdown

Allowing for the 90-day total investment horizon Dupont De is expected to generate 9.83 times less return on investment than Hargreaves Lansdown. In addition to that, Dupont De is 1.14 times more volatile than Hargreaves Lansdown plc. It trades about 0.01 of its total potential returns per unit of risk. Hargreaves Lansdown plc is currently generating about 0.15 per unit of volatility. If you would invest  1,286  in Hargreaves Lansdown plc on December 21, 2024 and sell it today you would earn a total of  145.00  from holding Hargreaves Lansdown plc or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.53%
Values	Daily Returns

Dupont De Nemours  vs.  Hargreaves Lansdown plc

Dupont De Nemours

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dupont De Nemours are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Hargreaves Lansdown plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hargreaves Lansdown plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Hargreaves Lansdown reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dupont De and Hargreaves Lansdown

The main advantage of trading using opposite Dupont De and Hargreaves Lansdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Hargreaves Lansdown 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 Hargreaves Lansdown will offset losses from the drop in Hargreaves Lansdown's long position.

The idea behind Dupont De Nemours and Hargreaves Lansdown plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.