Correlation Between Ascent Solar and Douglas Emmett

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

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

Diversification Opportunities for Ascent Solar and Douglas Emmett

-0.11

Correlation Coefficient

Ascent Solar  Douglas Emmett

Good diversification

The 3 months correlation between Ascent and Douglas is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ascent Solar Technologies, and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Ascent Solar 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 Ascent Solar Technologies, are associated (or correlated) with Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Ascent Solar i.e., Ascent Solar and Douglas Emmett go up and down completely randomly.

Pair Corralation between Ascent Solar and Douglas Emmett

Given the investment horizon of 90 days Ascent Solar Technologies, is expected to generate 3.75 times more return on investment than Douglas Emmett. However, Ascent Solar is 3.75 times more volatile than Douglas Emmett. It trades about 0.08 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.04 per unit of risk. If you would invest  277.00  in Ascent Solar Technologies, on October 9, 2024 and sell it today you would earn a total of  42.00  from holding Ascent Solar Technologies, or generate 15.16% return on investment over 90 days.

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

Ascent Solar Technologies,  vs.  Douglas Emmett

Ascent Solar Technol

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ascent Solar Technologies, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Ascent Solar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Douglas Emmett

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Douglas Emmett are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Douglas Emmett may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ascent Solar and Douglas Emmett

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

The idea behind Ascent Solar Technologies, and Douglas Emmett 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.