Correlation Between El Puerto and Dow Jones
Can any of the company-specific risk be diversified away by investing in both El Puerto and Dow Jones 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 El Puerto and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between El Puerto de and Dow Jones Industrial, you can compare the effects of market volatilities on El Puerto 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 El Puerto with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Puerto and Dow Jones.
Diversification Opportunities for El Puerto and Dow Jones
Pay attention - limited upside
The 3 months correlation between ELPQF and Dow is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding El Puerto de 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 El Puerto 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 El Puerto de 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 El Puerto i.e., El Puerto and Dow Jones go up and down completely randomly.
Pair Corralation between El Puerto and Dow Jones
Assuming the 90 days horizon El Puerto de is expected to under-perform the Dow Jones. In addition to that, El Puerto is 2.7 times more volatile than Dow Jones Industrial. It trades about -0.22 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
El Puerto de vs. Dow Jones Industrial
Performance |
| Timeline |
El Puerto and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
El Puerto de
Pair trading matchups for El Puerto
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with El Puerto and Dow Jones
The main advantage of trading using opposite El Puerto and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Puerto 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.| El Puerto vs. Mativ Holdings | El Puerto vs. NioCorp Developments Ltd | El Puerto vs. East Africa Metals | El Puerto vs. Summit Materials |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |