Correlation Between Douglas Elliman and CKX Lands

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

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

Diversification Opportunities for Douglas Elliman and CKX Lands

0.08

Correlation Coefficient

Douglas Elliman  CKX Lands

Significant diversification

The 3 months correlation between Douglas and CKX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and CKX Lands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKX Lands and Douglas Elliman 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 Elliman are associated (or correlated) with CKX Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKX Lands has no effect on the direction of Douglas Elliman i.e., Douglas Elliman and CKX Lands go up and down completely randomly.

Pair Corralation between Douglas Elliman and CKX Lands

Given the investment horizon of 90 days Douglas Elliman is expected to generate 2.37 times more return on investment than CKX Lands. However, Douglas Elliman is 2.37 times more volatile than CKX Lands. It trades about 0.01 of its potential returns per unit of risk. CKX Lands is currently generating about -0.1 per unit of risk. If you would invest  227.00  in Douglas Elliman on November 19, 2024 and sell it today you would lose (9.00) from holding Douglas Elliman or give up 3.96% of portfolio value over 90 days.

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

Douglas Elliman  vs.  CKX Lands

Douglas Elliman

Risk-Adjusted Performance

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

CKX Lands

Risk-Adjusted Performance

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Douglas Elliman and CKX Lands

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

The idea behind Douglas Elliman and CKX Lands 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.