Correlation Between Iron Mountain and Realty Income
Can any of the company-specific risk be diversified away by investing in both Iron Mountain and Realty Income 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 Iron Mountain and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Realty Income, you can compare the effects of market volatilities on Iron Mountain and Realty Income 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 Iron Mountain with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Realty Income.
Diversification Opportunities for Iron Mountain and Realty Income
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iron and Realty is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Iron Mountain i.e., Iron Mountain and Realty Income go up and down completely randomly.
Pair Corralation between Iron Mountain and Realty Income
Considering the 90-day investment horizon Iron Mountain Incorporated is expected to generate 1.34 times more return on investment than Realty Income. However, Iron Mountain is 1.34 times more volatile than Realty Income. It trades about 0.14 of its potential returns per unit of risk. Realty Income is currently generating about 0.02 per unit of risk. If you would invest 5,617 in Iron Mountain Incorporated on September 12, 2024 and sell it today you would earn a total of 5,711 from holding Iron Mountain Incorporated or generate 101.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Realty Income
Performance |
| Timeline |
| Iron Mountain |
| Realty Income |
Iron Mountain and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Realty Income
The main advantage of trading using opposite Iron Mountain and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Iron Mountain vs. Equinix | Iron Mountain vs. Crown Castle | Iron Mountain vs. American Tower Corp | Iron Mountain vs. Hannon Armstrong Sustainable |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 CEOs Directory module to screen CEOs from public companies around the world.
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