Correlation Between Digital Realty and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Digital Realty and Gladstone Commercial 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 Gladstone Commercial 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 Gladstone Commercial Corp, you can compare the effects of market volatilities on Digital Realty and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Gladstone Commercial.
Diversification Opportunities for Digital Realty and Gladstone Commercial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Digital and Gladstone is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Digital Realty i.e., Digital Realty and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Digital Realty and Gladstone Commercial
Assuming the 90 days trading horizon Digital Realty is expected to generate 1.98 times less return on investment than Gladstone Commercial. But when comparing it to its historical volatility, Digital Realty Trust is 1.4 times less risky than Gladstone Commercial. It trades about 0.07 of its potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,877 in Gladstone Commercial Corp on August 24, 2024 and sell it today you would earn a total of 520.00 from holding Gladstone Commercial Corp or generate 27.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Realty Trust vs. Gladstone Commercial Corp
Performance |
| Timeline |
| Digital Realty Trust |
| Gladstone Commercial Corp |
Digital Realty and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Gladstone Commercial
The main advantage of trading using opposite Digital Realty and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.| Digital Realty vs. Digital Realty Trust | Digital Realty vs. Digital Realty Trust | Digital Realty vs. Federal Realty Investment | Digital Realty vs. Kimco Realty |
| Gladstone Commercial vs. City Office REIT | Gladstone Commercial vs. Armada Hoffler Properties | Gladstone Commercial vs. Digital Realty Trust | Gladstone Commercial vs. Global Net Lease |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |