Correlation Between Terreno Realty and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Terreno Realty 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 Terreno Realty and Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Realty and Douglas Emmett, you can compare the effects of market volatilities on Terreno Realty 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 Terreno Realty with a short position of Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Realty and Douglas Emmett.
Diversification Opportunities for Terreno Realty and Douglas Emmett
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Terreno and Douglas is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Realty and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Terreno Realty 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 Terreno Realty 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 Terreno Realty i.e., Terreno Realty and Douglas Emmett go up and down completely randomly.
Pair Corralation between Terreno Realty and Douglas Emmett
Given the investment horizon of 90 days Terreno Realty is expected to generate 0.63 times more return on investment than Douglas Emmett. However, Terreno Realty is 1.58 times less risky than Douglas Emmett. It trades about 0.27 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.06 per unit of risk. If you would invest 5,898 in Terreno Realty on November 30, 2024 and sell it today you would earn a total of 884.00 from holding Terreno Realty or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terreno Realty vs. Douglas Emmett
Performance |
| Timeline |
| Terreno Realty |
| Douglas Emmett |
Terreno Realty and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terreno Realty and Douglas Emmett
The main advantage of trading using opposite Terreno Realty and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Realty 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.| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First Industrial Realty |
| Douglas Emmett vs. Brandywine Realty Trust | Douglas Emmett vs. Kilroy Realty Corp | Douglas Emmett vs. Piedmont Office Realty | Douglas Emmett vs. City Office |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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