Correlation Between SL Green and Digital Realty
Can any of the company-specific risk be diversified away by investing in both SL Green 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 SL Green and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SL Green Realty and Digital Realty Trust, you can compare the effects of market volatilities on SL Green 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 SL Green with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SL Green and Digital Realty.
Diversification Opportunities for SL Green and Digital Realty
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GEI and Digital is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SL Green Realty 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 SL Green 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 SL Green Realty 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 SL Green i.e., SL Green and Digital Realty go up and down completely randomly.
Pair Corralation between SL Green and Digital Realty
Assuming the 90 days horizon SL Green is expected to generate 9.45 times less return on investment than Digital Realty. In addition to that, SL Green is 1.05 times more volatile than Digital Realty Trust. It trades about 0.03 of its total potential returns per unit of risk. Digital Realty Trust is currently generating about 0.31 per unit of volatility. If you would invest 16,120 in Digital Realty Trust on September 4, 2024 and sell it today you would earn a total of 2,190 from holding Digital Realty Trust or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SL Green Realty vs. Digital Realty Trust
Performance |
| Timeline |
| SL Green Realty |
| Digital Realty Trust |
SL Green and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SL Green and Digital Realty
The main advantage of trading using opposite SL Green and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SL Green 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.| SL Green vs. 24SEVENOFFICE GROUP AB | SL Green vs. LGI Homes | SL Green vs. Corporate Office Properties | SL Green vs. Autohome ADR |
| Digital Realty vs. ORMAT TECHNOLOGIES | Digital Realty vs. YOOMA WELLNESS INC | Digital Realty vs. Bumrungrad Hospital Public | Digital Realty vs. Axcelis Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |