Correlation Between Prologis and Douglas Emmett

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

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

Diversification Opportunities for Prologis and Douglas Emmett

0.76

Correlation Coefficient

Prologis  Douglas Emmett

Poor diversification

The 3 months correlation between Prologis and Douglas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Prologis 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 Prologis 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 Prologis i.e., Prologis and Douglas Emmett go up and down completely randomly.

Pair Corralation between Prologis and Douglas Emmett

Considering the 90-day investment horizon Prologis is expected to generate 2.27 times less return on investment than Douglas Emmett. But when comparing it to its historical volatility, Prologis is 1.21 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 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,483  in Douglas Emmett on June 10, 2025 and sell it today you would earn a total of  172.00  from holding Douglas Emmett or generate 11.6% return on investment over 90 days.

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

Prologis  vs.  Douglas Emmett

Prologis

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Prologis are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Prologis is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Douglas Emmett

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Douglas Emmett are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Douglas Emmett may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Prologis and Douglas Emmett

The main advantage of trading using opposite Prologis and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prologis 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 Prologis 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..