Correlation Between Lendinvest PLC and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC 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 Lendinvest PLC and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Digital Realty Trust, you can compare the effects of market volatilities on Lendinvest PLC 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 Lendinvest PLC with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Digital Realty.
Diversification Opportunities for Lendinvest PLC and Digital Realty
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendinvest and Digital is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC 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 Lendinvest PLC i.e., Lendinvest PLC and Digital Realty go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Digital Realty
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 2.48 times less return on investment than Digital Realty. But when comparing it to its historical volatility, Lendinvest PLC is 1.26 times less risky than Digital Realty. It trades about 0.08 of its potential returns per unit of risk. Digital Realty Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 18,325 in Digital Realty Trust on August 29, 2024 and sell it today you would earn a total of 949.00 from holding Digital Realty Trust or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lendinvest PLC vs. Digital Realty Trust
Performance |
| Timeline |
| Lendinvest PLC |
| Digital Realty Trust |
Lendinvest PLC and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Digital Realty
The main advantage of trading using opposite Lendinvest PLC and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC 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.| Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Neometals | Lendinvest PLC vs. Coor Service Management | Lendinvest PLC vs. Albion Technology General |
| Digital Realty vs. Lendinvest PLC | Digital Realty vs. Neometals | Digital Realty vs. Coor Service Management | Digital Realty vs. Albion Technology General |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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