Correlation Between New England and Douglas Elliman
Can any of the company-specific risk be diversified away by investing in both New England and Douglas Elliman 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 New England and Douglas Elliman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New England Realty and Douglas Elliman, you can compare the effects of market volatilities on New England and Douglas Elliman 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 New England with a short position of Douglas Elliman. Check out your portfolio center. Please also check ongoing floating volatility patterns of New England and Douglas Elliman.
Diversification Opportunities for New England and Douglas Elliman
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and Douglas is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding New England Realty and Douglas Elliman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Elliman and New England 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 New England Realty are associated (or correlated) with Douglas Elliman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Elliman has no effect on the direction of New England i.e., New England and Douglas Elliman go up and down completely randomly.
Pair Corralation between New England and Douglas Elliman
Considering the 90-day investment horizon New England is expected to generate 43.91 times less return on investment than Douglas Elliman. But when comparing it to its historical volatility, New England Realty is 1.66 times less risky than Douglas Elliman. It trades about 0.01 of its potential returns per unit of risk. Douglas Elliman is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 199.00 in Douglas Elliman on August 27, 2024 and sell it today you would earn a total of 66.00 from holding Douglas Elliman or generate 33.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 38.1% |
| Values | Daily Returns |
New England Realty vs. Douglas Elliman
Performance |
| Timeline |
| New England Realty |
| Douglas Elliman |
New England and Douglas Elliman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New England and Douglas Elliman
The main advantage of trading using opposite New England and Douglas Elliman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New England position performs unexpectedly, Douglas Elliman 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 Elliman will offset losses from the drop in Douglas Elliman's long position.| New England vs. The Intergroup | New England vs. Transcontinental Realty Investors | New England vs. American Realty Investors | New England vs. Gyrodyne Company of |
| Douglas Elliman vs. New England Realty | Douglas Elliman vs. Frp Holdings Ord | Douglas Elliman vs. Marcus Millichap | Douglas Elliman vs. Transcontinental Realty Investors |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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