Correlation Between Henderson Land and Stratus Properties

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

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

Diversification Opportunities for Henderson Land and Stratus Properties

0.0

Correlation Coefficient

Henderson Land  Stratus Properties

Pay attention - limited upside

The 3 months correlation between Henderson and Stratus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Land and Stratus Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratus Properties and Henderson 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 Henderson Land are associated (or correlated) with Stratus Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratus Properties has no effect on the direction of Henderson Land i.e., Henderson Land and Stratus Properties go up and down completely randomly.

Pair Corralation between Henderson Land and Stratus Properties

If you would invest (100.00) in Henderson Land on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Henderson Land or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Henderson Land  vs.  Stratus Properties

Henderson Land

Risk-Adjusted Performance

Very Weak

Over the last 90 days Henderson Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Henderson Land is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Stratus Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stratus Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Henderson Land and Stratus Properties

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

The idea behind Henderson Land and Stratus 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.