Correlation Between Douglas Emmett and Highwoods Properties
Can any of the company-specific risk be diversified away by investing in both Douglas Emmett and Highwoods 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 Emmett and Highwoods Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Emmett and Highwoods Properties, you can compare the effects of market volatilities on Douglas Emmett and Highwoods 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 Emmett with a short position of Highwoods Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Emmett and Highwoods Properties.
Diversification Opportunities for Douglas Emmett and Highwoods Properties
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Douglas and Highwoods is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett and Highwoods Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwoods Properties 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 Highwoods Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwoods Properties has no effect on the direction of Douglas Emmett i.e., Douglas Emmett and Highwoods Properties go up and down completely randomly.
Pair Corralation between Douglas Emmett and Highwoods Properties
Considering the 90-day investment horizon Douglas Emmett is expected to under-perform the Highwoods Properties. In addition to that, Douglas Emmett is 1.63 times more volatile than Highwoods Properties. It trades about -0.04 of its total potential returns per unit of risk. Highwoods Properties is currently generating about 0.02 per unit of volatility. If you would invest 3,008 in Highwoods Properties on October 21, 2024 and sell it today you would earn a total of 14.00 from holding Highwoods Properties or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Douglas Emmett vs. Highwoods Properties
Performance |
| Timeline |
| Douglas Emmett |
| Highwoods Properties |
Douglas Emmett and Highwoods Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Emmett and Highwoods Properties
The main advantage of trading using opposite Douglas Emmett and Highwoods Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Emmett position performs unexpectedly, Highwoods 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 Highwoods Properties will offset losses from the drop in Highwoods Properties' long position.| Douglas Emmett vs. Brandywine Realty Trust | Douglas Emmett vs. Kilroy Realty Corp | Douglas Emmett vs. Piedmont Office Realty | Douglas Emmett vs. City Office |
| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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