Correlation Between Digitalbridge and Aroundtown
Can any of the company-specific risk be diversified away by investing in both Digitalbridge and Aroundtown 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 Digitalbridge and Aroundtown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digitalbridge Group and Aroundtown SA, you can compare the effects of market volatilities on Digitalbridge and Aroundtown 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 Digitalbridge with a short position of Aroundtown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digitalbridge and Aroundtown.
Diversification Opportunities for Digitalbridge and Aroundtown
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digitalbridge and Aroundtown is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Digitalbridge Group and Aroundtown SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aroundtown SA and Digitalbridge 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 Digitalbridge Group are associated (or correlated) with Aroundtown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aroundtown SA has no effect on the direction of Digitalbridge i.e., Digitalbridge and Aroundtown go up and down completely randomly.
Pair Corralation between Digitalbridge and Aroundtown
Given the investment horizon of 90 days Digitalbridge is expected to generate 2.09 times less return on investment than Aroundtown. But when comparing it to its historical volatility, Digitalbridge Group is 1.29 times less risky than Aroundtown. It trades about 0.02 of its potential returns per unit of risk. Aroundtown SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Aroundtown SA on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Aroundtown SA or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digitalbridge Group vs. Aroundtown SA
Performance |
| Timeline |
| Digitalbridge Group |
| Aroundtown SA |
Digitalbridge and Aroundtown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digitalbridge and Aroundtown
The main advantage of trading using opposite Digitalbridge and Aroundtown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digitalbridge position performs unexpectedly, Aroundtown 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 Aroundtown will offset losses from the drop in Aroundtown's long position.| Digitalbridge vs. Marcus Millichap | Digitalbridge vs. Jones Lang LaSalle | Digitalbridge vs. CBRE Group Class | Digitalbridge vs. Colliers International Group |
| Aroundtown vs. Asia Pptys | Aroundtown vs. Adler Group SA | Aroundtown vs. Aztec Land Comb | Aroundtown vs. Ambase Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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