Correlation Between Douglas Elliman and Baron Real

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

By analyzing existing cross correlation between Douglas Elliman and Baron Real Estate, you can compare the effects of market volatilities on Douglas Elliman and Baron Real 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 Baron Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Douglas Elliman and Baron Real.

Diversification Opportunities for Douglas Elliman and Baron Real

0.75

Correlation Coefficient

Douglas Elliman  Baron Real

Poor diversification

The 3 months correlation between Douglas and Baron is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Elliman and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate 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 Baron Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Douglas Elliman i.e., Douglas Elliman and Baron Real go up and down completely randomly.

Pair Corralation between Douglas Elliman and Baron Real

Given the investment horizon of 90 days Douglas Elliman is expected to under-perform the Baron Real. In addition to that, Douglas Elliman is 4.23 times more volatile than Baron Real Estate. It trades about -0.35 of its total potential returns per unit of risk. Baron Real Estate is currently generating about -0.23 per unit of volatility. If you would invest  1,757  in Baron Real Estate on September 28, 2024 and sell it today you would lose (94.00) from holding Baron Real Estate or give up 5.35% of portfolio value over 90 days.

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

Douglas Elliman  vs.  Baron Real Estate

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 nearly stable basic indicators, Douglas Elliman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Baron Real Estate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Real Estate are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Baron Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Douglas Elliman and Baron Real

The main advantage of trading using opposite Douglas Elliman and Baron Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Douglas Elliman position performs unexpectedly, Baron Real 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 Baron Real will offset losses from the drop in Baron Real's long position.

The idea behind Douglas Elliman and Baron Real Estate 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.