Correlation Between Armada Hoffler and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Digital 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 Armada Hoffler and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hoffler Properties and Digital Realty Trust, you can compare the effects of market volatilities on Armada Hoffler and Digital 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 Armada Hoffler with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Digital Realty.
Diversification Opportunities for Armada Hoffler and Digital Realty
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Armada and Digital is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Digital Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Realty Trust and Armada Hoffler 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 Armada Hoffler Properties are associated (or correlated) with Digital Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Realty Trust has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Digital Realty go up and down completely randomly.
Pair Corralation between Armada Hoffler and Digital Realty
Assuming the 90 days trading horizon Armada Hoffler Properties is expected to generate 1.3 times more return on investment than Digital Realty. However, Armada Hoffler is 1.3 times more volatile than Digital Realty Trust. It trades about -0.09 of its potential returns per unit of risk. Digital Realty Trust is currently generating about -0.26 per unit of risk. If you would invest 2,410 in Armada Hoffler Properties on August 27, 2024 and sell it today you would lose (46.00) from holding Armada Hoffler Properties or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Digital Realty Trust
Performance |
| Timeline |
| Armada Hoffler Properties |
| Digital Realty Trust |
Armada Hoffler and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Digital Realty
The main advantage of trading using opposite Armada Hoffler and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Digital 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 Digital Realty will offset losses from the drop in Digital Realty's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr | Armada Hoffler vs. Aquagold International |
| Digital Realty vs. EPR Properties Series | Digital Realty vs. EPR Properties | Digital Realty vs. EPR Properties | Digital Realty 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |