Correlation Between Prologis and Duke Realty

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

By analyzing existing cross correlation between Prologis and Duke Realty, you can compare the effects of market volatilities on Prologis and Duke Realty 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 Duke Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and Duke Realty.

Diversification Opportunities for Prologis and Duke Realty

0.89

Correlation Coefficient

Prologis  Duke Realty

Very poor diversification

The 3 months correlation between Prologis and Duke is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and Duke Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Realty 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 Duke Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duke Realty has no effect on the direction of Prologis i.e., Prologis and Duke Realty go up and down completely randomly.

Pair Corralation between Prologis and Duke Realty

If you would invest  4,820  in Duke Realty on January 30, 2024 and sell it today you would earn a total of  0.00  from holding Duke Realty or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	4.55%
Values	Daily Returns

Prologis  vs.  Duke Realty

Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Duke Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duke Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Duke Realty is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prologis and Duke Realty

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

The idea behind Prologis and Duke Realty 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..