Correlation Between Dupont De and Lyxor UCITS

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

Diversification Opportunities for Dupont De and Lyxor UCITS

0.25

Correlation Coefficient

Dupont De  Lyxor UCITS

Modest diversification

The 3 months correlation between Dupont and Lyxor is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Lyxor UCITS MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS MSCI 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS MSCI has no effect on the direction of Dupont De i.e., Dupont De and Lyxor UCITS go up and down completely randomly.

Pair Corralation between Dupont De and Lyxor UCITS

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.67 times more return on investment than Lyxor UCITS. However, Dupont De is 1.67 times more volatile than Lyxor UCITS MSCI. It trades about 0.02 of its potential returns per unit of risk. Lyxor UCITS MSCI is currently generating about -0.06 per unit of risk. If you would invest  7,557  in Dupont De Nemours on December 28, 2024 and sell it today you would earn a total of  92.00  from holding Dupont De Nemours or generate 1.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Dupont De Nemours  vs.  Lyxor UCITS MSCI

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.

Lyxor UCITS MSCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyxor UCITS MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Lyxor UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dupont De and Lyxor UCITS

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

The idea behind Dupont De Nemours and Lyxor UCITS MSCI 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.