Correlation Between Elron Electronic and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Elron Electronic 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 Elron Electronic and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elron Electronic Industries and Dow Jones Industrial, you can compare the effects of market volatilities on Elron Electronic 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 Elron Electronic with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elron Electronic and Dow Jones.
Diversification Opportunities for Elron Electronic and Dow Jones
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elron and Dow is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Elron Electronic Industries 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 Elron Electronic 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 Elron Electronic Industries 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 Elron Electronic i.e., Elron Electronic and Dow Jones go up and down completely randomly.
Pair Corralation between Elron Electronic and Dow Jones
Assuming the 90 days trading horizon Elron Electronic Industries is expected to generate 1.76 times more return on investment than Dow Jones. However, Elron Electronic is 1.76 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of risk. If you would invest 44,550 in Elron Electronic Industries on November 3, 2024 and sell it today you would earn a total of 2,040 from holding Elron Electronic Industries or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Elron Electronic Industries vs. Dow Jones Industrial
Performance |
| Timeline |
Elron Electronic and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Elron Electronic Industries
Pair trading matchups for Elron Electronic
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Elron Electronic and Dow Jones
The main advantage of trading using opposite Elron Electronic and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elron Electronic 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.| Elron Electronic vs. Elbit Systems | Elron Electronic vs. Discount Investment Corp | Elron Electronic vs. Clal Insurance Enterprises | Elron Electronic vs. AudioCodes |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |