Correlation Between Element Fleet and Dream Industrial

Can any of the company-specific risk be diversified away by investing in both Element Fleet and Dream Industrial 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 Element Fleet and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Element Fleet Management and Dream Industrial Real, you can compare the effects of market volatilities on Element Fleet and Dream Industrial 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 Element Fleet with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Fleet and Dream Industrial.

Diversification Opportunities for Element Fleet and Dream Industrial

0.8

Correlation Coefficient

Element Fleet  Dream Industrial

Very poor diversification

The 3 months correlation between Element and Dream is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and Element Fleet 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 Element Fleet Management are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of Element Fleet i.e., Element Fleet and Dream Industrial go up and down completely randomly.

Pair Corralation between Element Fleet and Dream Industrial

Assuming the 90 days trading horizon Element Fleet Management is expected to generate 0.84 times more return on investment than Dream Industrial. However, Element Fleet Management is 1.2 times less risky than Dream Industrial. It trades about 0.31 of its potential returns per unit of risk. Dream Industrial Real is currently generating about 0.19 per unit of risk. If you would invest  2,955  in Element Fleet Management on April 22, 2025 and sell it today you would earn a total of  625.00  from holding Element Fleet Management or generate 21.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Element Fleet Management  vs.  Dream Industrial Real

Element Fleet Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Element Fleet displayed solid returns over the last few months and may actually be approaching a breakup point.

Dream Industrial Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Industrial Real are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dream Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Element Fleet and Dream Industrial

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

The idea behind Element Fleet Management and Dream Industrial Real 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.