Correlation Between Hudson Pacific and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific 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 Hudson Pacific and Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Douglas Emmett, you can compare the effects of market volatilities on Hudson Pacific 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 Hudson Pacific with a short position of Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Douglas Emmett.
Diversification Opportunities for Hudson Pacific and Douglas Emmett
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hudson and Douglas is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Hudson Pacific 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 Hudson Pacific Properties 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 Hudson Pacific i.e., Hudson Pacific and Douglas Emmett go up and down completely randomly.
Pair Corralation between Hudson Pacific and Douglas Emmett
Considering the 90-day investment horizon Hudson Pacific Properties is expected to generate 1.96 times more return on investment than Douglas Emmett. However, Hudson Pacific is 1.96 times more volatile than Douglas Emmett. It trades about 0.11 of its potential returns per unit of risk. Douglas Emmett is currently generating about 0.13 per unit of risk. If you would invest 206.00 in Hudson Pacific Properties on April 29, 2025 and sell it today you would earn a total of 46.00 from holding Hudson Pacific Properties or generate 22.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Pacific Properties vs. Douglas Emmett
Performance |
| Timeline |
| Hudson Pacific Properties |
| Douglas Emmett |
Hudson Pacific and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Pacific and Douglas Emmett
The main advantage of trading using opposite Hudson Pacific and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific 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.| Hudson Pacific vs. Douglas Emmett | Hudson Pacific vs. Brandywine Realty Trust | Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Piedmont Office Realty |
| Douglas Emmett vs. Hudson Pacific Properties | Douglas Emmett vs. Kilroy Realty Corp | Douglas Emmett vs. COPT Defense Properties | Douglas Emmett vs. Highwoods Properties |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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