Correlation Between Douglas Elliman and Global Net
Can any of the company-specific risk be diversified away by investing in both Douglas Elliman and Global Net 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 Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Douglas Elliman and Global Net Lease, you can compare the effects of market volatilities on Douglas Elliman and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Elliman and Global Net.
Diversification Opportunities for Douglas Elliman and Global Net
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Douglas and Global is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Douglas Elliman i.e., Douglas Elliman and Global Net go up and down completely randomly.
Pair Corralation between Douglas Elliman and Global Net
Given the investment horizon of 90 days Douglas Elliman is expected to generate 3.39 times more return on investment than Global Net. However, Douglas Elliman is 3.39 times more volatile than Global Net Lease. It trades about 0.33 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.08 per unit of risk. If you would invest 199.00 in Douglas Elliman on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Douglas Elliman or generate 35.68% 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. Global Net Lease
Performance |
| Timeline |
| Douglas Elliman |
| Global Net Lease |
Douglas Elliman and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Elliman and Global Net
The main advantage of trading using opposite Douglas Elliman and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Elliman position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Douglas Elliman vs. New England Realty | Douglas Elliman vs. Frp Holdings Ord | Douglas Elliman vs. Marcus Millichap | Douglas Elliman vs. Transcontinental Realty Investors |
| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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