Correlation Between Douglas Elliman and Stratus Properties
Can any of the company-specific risk be diversified away by investing in both Douglas Elliman 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 Douglas Elliman and Stratus 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 Stratus Properties, you can compare the effects of market volatilities on Douglas Elliman 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 Douglas Elliman with a short position of Stratus Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Elliman and Stratus Properties.
Diversification Opportunities for Douglas Elliman and Stratus Properties
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Douglas and Stratus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and Stratus Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratus 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 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 Douglas Elliman i.e., Douglas Elliman and Stratus Properties go up and down completely randomly.
Pair Corralation between Douglas Elliman and Stratus Properties
Given the investment horizon of 90 days Douglas Elliman is expected to generate 1.2 times more return on investment than Stratus Properties. However, Douglas Elliman is 1.2 times more volatile than Stratus Properties. It trades about 0.13 of its potential returns per unit of risk. Stratus Properties is currently generating about -0.11 per unit of risk. If you would invest 165.00 in Douglas Elliman on October 20, 2024 and sell it today you would earn a total of 14.00 from holding Douglas Elliman or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Douglas Elliman vs. Stratus Properties
Performance |
| Timeline |
| Douglas Elliman |
| Stratus Properties |
Douglas Elliman and Stratus Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Douglas Elliman and Stratus Properties
The main advantage of trading using opposite Douglas Elliman and Stratus Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Elliman 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.| Douglas Elliman vs. Frp Holdings Ord | Douglas Elliman vs. Marcus Millichap | Douglas Elliman vs. Transcontinental Realty Investors | Douglas Elliman vs. Fathom Holdings |
| Stratus Properties vs. Mitsui Fudosan Co | Stratus Properties vs. St Joe Company | Stratus Properties vs. New World Development |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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