Correlation Between Broadstone Net and Douglas Emmett

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

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

Diversification Opportunities for Broadstone Net and Douglas Emmett

0.13

Correlation Coefficient

Broadstone Net  Douglas Emmett

Average diversification

The 3 months correlation between Broadstone and Douglas is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Broadstone Net 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 Broadstone Net Lease 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 Broadstone Net i.e., Broadstone Net and Douglas Emmett go up and down completely randomly.

Pair Corralation between Broadstone Net and Douglas Emmett

Considering the 90-day investment horizon Broadstone Net Lease is expected to generate 0.63 times more return on investment than Douglas Emmett. However, Broadstone Net Lease is 1.58 times less risky than Douglas Emmett. It trades about 0.06 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.1 per unit of risk. If you would invest  1,536  in Broadstone Net Lease on February 3, 2025 and sell it today you would earn a total of  84.00  from holding Broadstone Net Lease or generate 5.47% return on investment over 90 days.

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

Broadstone Net Lease  vs.  Douglas Emmett

Broadstone Net Lease

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Broadstone Net Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Douglas Emmett

Risk-Adjusted Performance

Very Weak

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Broadstone Net and Douglas Emmett

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

The idea behind Broadstone Net Lease and Douglas Emmett 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.