Correlation Between El Puerto and Dillards Capital

Can any of the company-specific risk be diversified away by investing in both El Puerto and Dillards Capital 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 Dillards Capital 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 Dillards Capital Trust, you can compare the effects of market volatilities on El Puerto and Dillards Capital 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 Dillards Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of El Puerto and Dillards Capital.

Diversification Opportunities for El Puerto and Dillards Capital

-0.78

Correlation Coefficient

El Puerto  Dillards Capital

Pay attention - limited upside

The 3 months correlation between ELPQF and Dillards is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding El Puerto de and Dillards Capital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dillards Capital Trust 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 Dillards Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dillards Capital Trust has no effect on the direction of El Puerto i.e., El Puerto and Dillards Capital go up and down completely randomly.

Pair Corralation between El Puerto and Dillards Capital

Assuming the 90 days horizon El Puerto de is expected to under-perform the Dillards Capital. In addition to that, El Puerto is 5.84 times more volatile than Dillards Capital Trust. It trades about -0.08 of its total potential returns per unit of risk. Dillards Capital Trust is currently generating about 0.0 per unit of volatility. If you would invest  2,575  in Dillards Capital Trust on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Dillards Capital Trust or generate 0.0% 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.  Dillards Capital Trust

El Puerto de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days El Puerto de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Dillards Capital Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dillards Capital Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Dillards Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with El Puerto and Dillards Capital

The main advantage of trading using opposite El Puerto and Dillards Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if El Puerto position performs unexpectedly, Dillards Capital 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 Dillards Capital will offset losses from the drop in Dillards Capital's long position.

The idea behind El Puerto de and Dillards Capital Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.