Correlation Between EIH Associated and Dow Jones
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By analyzing existing cross correlation between EIH Associated Hotels and Dow Jones Industrial, you can compare the effects of market volatilities on EIH Associated and Dow Jones 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 EIH Associated with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIH Associated and Dow Jones.
Diversification Opportunities for EIH Associated and Dow Jones
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIH and Dow is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding EIH Associated Hotels and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and EIH Associated 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 EIH Associated Hotels are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of EIH Associated i.e., EIH Associated and Dow Jones go up and down completely randomly.
Pair Corralation between EIH Associated and Dow Jones
Assuming the 90 days trading horizon EIH Associated Hotels is expected to generate 11.18 times more return on investment than Dow Jones. However, EIH Associated is 11.18 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 21,761 in EIH Associated Hotels on August 25, 2024 and sell it today you would earn a total of 16,599 from holding EIH Associated Hotels or generate 76.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.42% |
| Values | Daily Returns |
EIH Associated Hotels vs. Dow Jones Industrial
Performance |
| Timeline |
EIH Associated and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
EIH Associated Hotels
Pair trading matchups for EIH Associated
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with EIH Associated and Dow Jones
The main advantage of trading using opposite EIH Associated and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIH Associated position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| EIH Associated vs. MMTC Limited | EIH Associated vs. Kingfa Science Technology | EIH Associated vs. Rico Auto Industries | EIH Associated vs. GACM Technologies Limited |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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