Correlation Between Digital Realty and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Digital Realty and Supermarket Income 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 Supermarket Income 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 Supermarket Income REIT, you can compare the effects of market volatilities on Digital Realty and Supermarket Income 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 Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Supermarket Income.
Diversification Opportunities for Digital Realty and Supermarket Income
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digital and Supermarket is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT 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 Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Digital Realty i.e., Digital Realty and Supermarket Income go up and down completely randomly.
Pair Corralation between Digital Realty and Supermarket Income
Assuming the 90 days trading horizon Digital Realty Trust is expected to under-perform the Supermarket Income. But the stock apears to be less risky and, when comparing its historical volatility, Digital Realty Trust is 1.05 times less risky than Supermarket Income. The stock trades about -0.25 of its potential returns per unit of risk. The Supermarket Income REIT is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 7,010 in Supermarket Income REIT on September 25, 2024 and sell it today you would lose (210.00) from holding Supermarket Income REIT or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digital Realty Trust vs. Supermarket Income REIT
Performance |
| Timeline |
| Digital Realty Trust |
| Supermarket Income REIT |
Digital Realty and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Supermarket Income
The main advantage of trading using opposite Digital Realty and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income'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 |
| Supermarket Income vs. Derwent London PLC | Supermarket Income vs. Hammerson PLC | Supermarket Income vs. Workspace Group PLC | Supermarket Income vs. Digital Realty Trust |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |