Correlation Between Healthpeak Properties and Douglas Elliman

Can any of the company-specific risk be diversified away by investing in both Healthpeak Properties 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 Healthpeak Properties and Douglas Elliman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Healthpeak Properties and Douglas Elliman, you can compare the effects of market volatilities on Healthpeak Properties 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 Healthpeak Properties with a short position of Douglas Elliman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and Douglas Elliman.

Diversification Opportunities for Healthpeak Properties and Douglas Elliman

0.08

Correlation Coefficient

Healthpeak Properties  Douglas Elliman

Significant diversification

The 3 months correlation between Healthpeak and Douglas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and Douglas Elliman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Elliman and Healthpeak Properties 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 Healthpeak Properties 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 Healthpeak Properties i.e., Healthpeak Properties and Douglas Elliman go up and down completely randomly.

Pair Corralation between Healthpeak Properties and Douglas Elliman

Considering the 90-day investment horizon Healthpeak Properties is expected to under-perform the Douglas Elliman. But the stock apears to be less risky and, when comparing its historical volatility, Healthpeak Properties is 3.73 times less risky than Douglas Elliman. The stock trades about -0.12 of its potential returns per unit of risk. The Douglas Elliman is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  183.00  in Douglas Elliman on September 28, 2024 and sell it today you would lose (29.00) from holding Douglas Elliman or give up 15.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Healthpeak Properties  vs.  Douglas Elliman

Healthpeak Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Douglas Elliman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Douglas Elliman has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Healthpeak Properties and Douglas Elliman

The main advantage of trading using opposite Healthpeak Properties and Douglas Elliman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthpeak Properties 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.

The idea behind Healthpeak Properties and Douglas Elliman pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.