Correlation Between Douglas Elliman and EPR Properties

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

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

Diversification Opportunities for Douglas Elliman and EPR Properties

-0.52

Correlation Coefficient

Douglas Elliman  EPR Properties

Excellent diversification

The 3 months correlation between Douglas and EPR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Douglas Elliman i.e., Douglas Elliman and EPR Properties go up and down completely randomly.

Pair Corralation between Douglas Elliman and EPR Properties

Given the investment horizon of 90 days Douglas Elliman is expected to generate 5.59 times more return on investment than EPR Properties. However, Douglas Elliman is 5.59 times more volatile than EPR Properties. It trades about 0.14 of its potential returns per unit of risk. EPR Properties is currently generating about -0.01 per unit of risk. If you would invest  166.00  in Douglas Elliman on August 31, 2024 and sell it today you would earn a total of  72.00  from holding Douglas Elliman or generate 43.37% return on investment over 90 days.

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

Douglas Elliman  vs.  EPR Properties

Douglas Elliman

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Douglas Elliman are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Douglas Elliman reported solid returns over the last few months and may actually be approaching a breakup point.

EPR Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, EPR Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Douglas Elliman and EPR Properties

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

The idea behind Douglas Elliman and EPR Properties 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.