Correlation Between Global Net and DigitalBridge
Can any of the company-specific risk be diversified away by investing in both Global Net and DigitalBridge 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 Global Net and DigitalBridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and DigitalBridge Group, you can compare the effects of market volatilities on Global Net and DigitalBridge 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 Global Net with a short position of DigitalBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and DigitalBridge.
Diversification Opportunities for Global Net and DigitalBridge
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and DigitalBridge is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and Global Net 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 Global Net Lease are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Global Net i.e., Global Net and DigitalBridge go up and down completely randomly.
Pair Corralation between Global Net and DigitalBridge
Assuming the 90 days trading horizon Global Net Lease is expected to generate 1.72 times more return on investment than DigitalBridge. However, Global Net is 1.72 times more volatile than DigitalBridge Group. It trades about -0.07 of its potential returns per unit of risk. DigitalBridge Group is currently generating about -0.23 per unit of risk. If you would invest 2,367 in Global Net Lease on August 29, 2024 and sell it today you would lose (43.00) from holding Global Net Lease or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. DigitalBridge Group
Performance |
| Timeline |
| Global Net Lease |
| DigitalBridge Group |
Global Net and DigitalBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and DigitalBridge
The main advantage of trading using opposite Global Net and DigitalBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, DigitalBridge 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 DigitalBridge will offset losses from the drop in DigitalBridge's long position.| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. ACRES Commercial Realty | DigitalBridge vs. Chimera Investment |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |