Correlation Between Dow Jones and Elpitiya Plantations
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By analyzing existing cross correlation between Dow Jones Industrial and Elpitiya Plantations PLC, you can compare the effects of market volatilities on Dow Jones and Elpitiya Plantations 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 Dow Jones with a short position of Elpitiya Plantations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Elpitiya Plantations.
Diversification Opportunities for Dow Jones and Elpitiya Plantations
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Elpitiya is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Elpitiya Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elpitiya Plantations PLC and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Elpitiya Plantations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elpitiya Plantations PLC has no effect on the direction of Dow Jones i.e., Dow Jones and Elpitiya Plantations go up and down completely randomly.
Pair Corralation between Dow Jones and Elpitiya Plantations
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.8 times more return on investment than Elpitiya Plantations. However, Dow Jones Industrial is 1.25 times less risky than Elpitiya Plantations. It trades about 0.29 of its potential returns per unit of risk. Elpitiya Plantations PLC is currently generating about -0.06 per unit of risk. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Dow Jones Industrial vs. Elpitiya Plantations PLC
Performance |
| Timeline |
Dow Jones and Elpitiya Plantations Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Elpitiya Plantations PLC
Pair trading matchups for Elpitiya Plantations
Pair Trading with Dow Jones and Elpitiya Plantations
The main advantage of trading using opposite Dow Jones and Elpitiya Plantations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Elpitiya Plantations 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 Elpitiya Plantations will offset losses from the drop in Elpitiya Plantations' long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Elpitiya Plantations vs. Amana Bank | Elpitiya Plantations vs. Union Chemicals Lanka | Elpitiya Plantations vs. Commercial Credit and | Elpitiya Plantations vs. ACL Plastics PLC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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