Correlation Between Digital Realty and Prosiebensat
Can any of the company-specific risk be diversified away by investing in both Digital Realty and Prosiebensat 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 Prosiebensat 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 Prosiebensat 1 Media, you can compare the effects of market volatilities on Digital Realty and Prosiebensat 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 Prosiebensat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Prosiebensat.
Diversification Opportunities for Digital Realty and Prosiebensat
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digital and Prosiebensat is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Prosiebensat 1 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosiebensat 1 Media 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 Prosiebensat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosiebensat 1 Media has no effect on the direction of Digital Realty i.e., Digital Realty and Prosiebensat go up and down completely randomly.
Pair Corralation between Digital Realty and Prosiebensat
Assuming the 90 days trading horizon Digital Realty Trust is expected to generate 0.81 times more return on investment than Prosiebensat. However, Digital Realty Trust is 1.23 times less risky than Prosiebensat. It trades about 0.24 of its potential returns per unit of risk. Prosiebensat 1 Media is currently generating about -0.16 per unit of risk. If you would invest 14,928 in Digital Realty Trust on August 29, 2024 and sell it today you would earn a total of 4,346 from holding Digital Realty Trust or generate 29.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Realty Trust vs. Prosiebensat 1 Media
Performance |
| Timeline |
| Digital Realty Trust |
| Prosiebensat 1 Media |
Digital Realty and Prosiebensat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Prosiebensat
The main advantage of trading using opposite Digital Realty and Prosiebensat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Prosiebensat 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 Prosiebensat will offset losses from the drop in Prosiebensat's long position.| Digital Realty vs. Lendinvest PLC | Digital Realty vs. Neometals | Digital Realty vs. Coor Service Management | Digital Realty vs. Albion Technology General |
| Prosiebensat vs. Lendinvest PLC | Prosiebensat vs. Neometals | Prosiebensat vs. Coor Service Management | Prosiebensat vs. Albion Technology General |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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