Correlation Between Asia Pptys and Douglas Elliman

Can any of the company-specific risk be diversified away by investing in both Asia Pptys and Douglas Elliman 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 Asia Pptys and Douglas Elliman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Pptys and Douglas Elliman, you can compare the effects of market volatilities on Asia Pptys and Douglas Elliman 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 Asia Pptys with a short position of Douglas Elliman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pptys and Douglas Elliman.

Diversification Opportunities for Asia Pptys and Douglas Elliman

-0.24

Correlation Coefficient

Asia Pptys  Douglas Elliman

Very good diversification

The 3 months correlation between Asia and Douglas is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pptys and Douglas Elliman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Elliman and Asia Pptys 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 Asia Pptys are associated (or correlated) with Douglas Elliman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Elliman has no effect on the direction of Asia Pptys i.e., Asia Pptys and Douglas Elliman go up and down completely randomly.

Pair Corralation between Asia Pptys and Douglas Elliman

Given the investment horizon of 90 days Asia Pptys is expected to generate 3.77 times more return on investment than Douglas Elliman. However, Asia Pptys is 3.77 times more volatile than Douglas Elliman. It trades about 0.08 of its potential returns per unit of risk. Douglas Elliman is currently generating about -0.01 per unit of risk. If you would invest  2.00  in Asia Pptys on September 21, 2024 and sell it today you would earn a total of  1.70  from holding Asia Pptys or generate 85.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Asia Pptys  vs.  Douglas Elliman

Asia Pptys

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Pptys are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Asia Pptys showed solid returns over the last few months and may actually be approaching a breakup point.

Douglas Elliman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Douglas Elliman has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Douglas Elliman is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Asia Pptys and Douglas Elliman

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

The idea behind Asia Pptys and Douglas Elliman 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.