Correlation Between Armada Hflr and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Douglas Emmett 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 Armada Hflr and Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and Douglas Emmett, you can compare the effects of market volatilities on Armada Hflr and Douglas Emmett 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 Armada Hflr with a short position of Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Douglas Emmett.
Diversification Opportunities for Armada Hflr and Douglas Emmett
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Armada and Douglas is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Armada Hflr i.e., Armada Hflr and Douglas Emmett go up and down completely randomly.
Pair Corralation between Armada Hflr and Douglas Emmett
Considering the 90-day investment horizon Armada Hflr is expected to generate 11.72 times less return on investment than Douglas Emmett. But when comparing it to its historical volatility, Armada Hflr Pr is 1.25 times less risky than Douglas Emmett. It trades about 0.02 of its potential returns per unit of risk. Douglas Emmett is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,326 in Douglas Emmett on September 3, 2024 and sell it today you would earn a total of 599.00 from holding Douglas Emmett or generate 45.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Douglas Emmett
Performance |
| Timeline |
| Armada Hflr Pr |
| Douglas Emmett |
Armada Hflr and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Douglas Emmett
The main advantage of trading using opposite Armada Hflr and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Douglas Emmett 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 Emmett will offset losses from the drop in Douglas Emmett's long position.| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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