Correlation Between Surf Air and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Surf Air 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 Surf Air and Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surf Air Mobility and Douglas Emmett, you can compare the effects of market volatilities on Surf Air 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 Surf Air with a short position of Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surf Air and Douglas Emmett.
Diversification Opportunities for Surf Air and Douglas Emmett
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surf and Douglas is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Surf Air Mobility and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett and Surf Air 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 Surf Air Mobility 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 Surf Air i.e., Surf Air and Douglas Emmett go up and down completely randomly.
Pair Corralation between Surf Air and Douglas Emmett
Given the investment horizon of 90 days Surf Air Mobility is expected to under-perform the Douglas Emmett. In addition to that, Surf Air is 2.53 times more volatile than Douglas Emmett. It trades about -0.21 of its total potential returns per unit of risk. Douglas Emmett is currently generating about -0.22 per unit of volatility. If you would invest 1,599 in Douglas Emmett on August 31, 2025 and sell it today you would lose (373.00) from holding Douglas Emmett or give up 23.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surf Air Mobility vs. Douglas Emmett
Performance |
| Timeline |
| Surf Air Mobility |
| Douglas Emmett |
Surf Air and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surf Air and Douglas Emmett
The main advantage of trading using opposite Surf Air and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surf Air 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.| Surf Air vs. Renewable Energy Trade | Surf Air vs. H2O Retailing | Surf Air vs. Sterling Construction | Surf Air vs. Everus Construction Group |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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