Correlation Between Dupont De and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Dupont De and LAir Liquide 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 LAir Liquide 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 LAir Liquide SA, you can compare the effects of market volatilities on Dupont De and LAir Liquide 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 LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and LAir Liquide.
Diversification Opportunities for Dupont De and LAir Liquide
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dupont and LAir is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide SA 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 LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of Dupont De i.e., Dupont De and LAir Liquide go up and down completely randomly.
Pair Corralation between Dupont De and LAir Liquide
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 0.84 times more return on investment than LAir Liquide. However, Dupont De Nemours is 1.19 times less risky than LAir Liquide. It trades about 0.56 of its potential returns per unit of risk. LAir Liquide SA is currently generating about 0.09 per unit of risk. If you would invest 6,922 in Dupont De Nemours on December 29, 2023 and sell it today you would earn a total of 728.00 from holding Dupont De Nemours or generate 10.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dupont De Nemours vs. LAir Liquide SA
Performance |
Timeline |
Dupont De Nemours |
LAir Liquide SA |
Dupont De and LAir Liquide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dupont De and LAir Liquide
The main advantage of trading using opposite Dupont De and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, LAir Liquide 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 LAir Liquide will offset losses from the drop in LAir Liquide's long position.Dupont De vs. FutureFuel Corp | Dupont De vs. Danimer Scientific | Dupont De vs. Ecovyst | Dupont De vs. Ingevity Corp |
LAir Liquide vs. Sherwin Williams Co | LAir Liquide vs. Ecolab Inc | LAir Liquide vs. Air Products And | LAir Liquide vs. PPG Industries |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |