Correlation Between Digital Realty and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Digital Realty and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on Digital Realty and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Alstria Office.
Diversification Opportunities for Digital Realty and Alstria Office
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digital and Alstria is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Digital Realty i.e., Digital Realty and Alstria Office go up and down completely randomly.
Pair Corralation between Digital Realty and Alstria Office
Assuming the 90 days horizon Digital Realty Trust is expected to under-perform the Alstria Office. In addition to that, Digital Realty is 3.19 times more volatile than alstria office REIT AG. It trades about -0.15 of its total potential returns per unit of risk. alstria office REIT AG is currently generating about 0.27 per unit of volatility. If you would invest 530.00 in alstria office REIT AG on November 7, 2024 and sell it today you would earn a total of 24.00 from holding alstria office REIT AG or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digital Realty Trust vs. alstria office REIT AG
Performance |
| Timeline |
| Digital Realty Trust |
| alstria office REIT |
Digital Realty and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Realty and Alstria Office
The main advantage of trading using opposite Digital Realty and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| Digital Realty vs. Retail Estates NV | Digital Realty vs. Fevertree Drinks PLC | Digital Realty vs. Suntory Beverage Food | Digital Realty vs. National Retail Properties |
| Alstria Office vs. Digital Realty Trust | Alstria Office vs. Gecina SA | Alstria Office vs. Japan Real Estate | Alstria Office vs. Mirvac Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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