Correlation Between Digital Realty and Mynaric AG
Can any of the company-specific risk be diversified away by investing in both Digital Realty and Mynaric AG 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 Digital Realty and Mynaric AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Realty Trust and Mynaric AG, you can compare the effects of market volatilities on Digital Realty and Mynaric AG 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 Digital Realty with a short position of Mynaric AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Mynaric AG.
Diversification Opportunities for Digital Realty and Mynaric AG
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and Mynaric is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Mynaric AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mynaric AG and Digital Realty 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 Digital Realty Trust are associated (or correlated) with Mynaric AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mynaric AG has no effect on the direction of Digital Realty i.e., Digital Realty and Mynaric AG go up and down completely randomly.
Pair Corralation between Digital Realty and Mynaric AG
Assuming the 90 days trading horizon Digital Realty Trust is expected to generate 0.4 times more return on investment than Mynaric AG. However, Digital Realty Trust is 2.51 times less risky than Mynaric AG. It trades about 0.08 of its potential returns per unit of risk. Mynaric AG is currently generating about -0.02 per unit of risk. If you would invest 9,939 in Digital Realty Trust on September 2, 2024 and sell it today you would earn a total of 9,824 from holding Digital Realty Trust or generate 98.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Digital Realty Trust vs. Mynaric AG
Performance |
| Timeline |
| Digital Realty Trust |
| Mynaric AG |
Digital Realty and Mynaric AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Mynaric AG
The main advantage of trading using opposite Digital Realty and Mynaric AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Mynaric AG 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 Mynaric AG will offset losses from the drop in Mynaric AG's long position.| Digital Realty vs. Uniper SE | Digital Realty vs. Mulberry Group PLC | Digital Realty vs. London Security Plc | Digital Realty vs. Triad Group PLC |
| Mynaric AG vs. Gamma Communications PLC | Mynaric AG vs. Smithson Investment Trust | Mynaric AG vs. Team Internet Group | Mynaric AG vs. Schroders Investment Trusts |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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