Correlation Between Aztec Land and Douglas Elliman

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

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

Diversification Opportunities for Aztec Land and Douglas Elliman

0.3

Correlation Coefficient

Aztec Land  Douglas Elliman

Weak diversification

The 3 months correlation between Aztec and Douglas is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aztec Land Comb and Douglas Elliman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Elliman and Aztec Land 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 Aztec Land Comb 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 Aztec Land i.e., Aztec Land and Douglas Elliman go up and down completely randomly.

Pair Corralation between Aztec Land and Douglas Elliman

Assuming the 90 days horizon Aztec Land Comb is expected to generate 0.5 times more return on investment than Douglas Elliman. However, Aztec Land Comb is 1.99 times less risky than Douglas Elliman. It trades about 0.09 of its potential returns per unit of risk. Douglas Elliman is currently generating about -0.01 per unit of risk. If you would invest  34,300  in Aztec Land Comb on September 21, 2024 and sell it today you would earn a total of  55,200  from holding Aztec Land Comb or generate 160.93% return on investment over 90 days.

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

Aztec Land Comb  vs.  Douglas Elliman

Aztec Land Comb

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Land Comb are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Aztec Land 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 Aztec Land and Douglas Elliman

The main advantage of trading using opposite Aztec Land and Douglas Elliman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aztec Land 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 Aztec Land Comb 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.