Correlation Between Douglas Emmett and NSANY

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

By analyzing existing cross correlation between Douglas Emmett and NSANY 275 09 MAR 28, you can compare the effects of market volatilities on Douglas Emmett and NSANY 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 Douglas Emmett with a short position of NSANY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Emmett and NSANY.

Diversification Opportunities for Douglas Emmett and NSANY

-0.17

Correlation Coefficient

Douglas Emmett  NSANY

Good diversification

The 3 months correlation between Douglas and NSANY is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett and NSANY 275 09 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSANY 275 09 and Douglas Emmett 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 Douglas Emmett are associated (or correlated) with NSANY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSANY 275 09 has no effect on the direction of Douglas Emmett i.e., Douglas Emmett and NSANY go up and down completely randomly.

Pair Corralation between Douglas Emmett and NSANY

Considering the 90-day investment horizon Douglas Emmett is expected to generate 2.66 times more return on investment than NSANY. However, Douglas Emmett is 2.66 times more volatile than NSANY 275 09 MAR 28. It trades about 0.02 of its potential returns per unit of risk. NSANY 275 09 MAR 28 is currently generating about -0.09 per unit of risk. If you would invest  1,715  in Douglas Emmett on October 10, 2024 and sell it today you would earn a total of  27.00  from holding Douglas Emmett or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.33%
Values	Daily Returns

Douglas Emmett  vs.  NSANY 275 09 MAR 28

Douglas Emmett

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Douglas Emmett are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Douglas Emmett is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

NSANY 275 09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSANY 275 09 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NSANY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Douglas Emmett and NSANY

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

The idea behind Douglas Emmett and NSANY 275 09 MAR 28 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.