Correlation Between Postal Realty and Digi International
Can any of the company-specific risk be diversified away by investing in both Postal Realty and Digi International 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 Postal Realty and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and Digi International, you can compare the effects of market volatilities on Postal Realty and Digi International 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 Postal Realty with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and Digi International.
Diversification Opportunities for Postal Realty and Digi International
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Postal and Digi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International and Postal 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 Postal Realty Trust are associated (or correlated) with Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Postal Realty i.e., Postal Realty and Digi International go up and down completely randomly.
Pair Corralation between Postal Realty and Digi International
Given the investment horizon of 90 days Postal Realty is expected to generate 3.57 times less return on investment than Digi International. But when comparing it to its historical volatility, Postal Realty Trust is 2.74 times less risky than Digi International. It trades about 0.05 of its potential returns per unit of risk. Digi International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,701 in Digi International on September 3, 2024 and sell it today you would earn a total of 621.00 from holding Digi International or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Realty Trust vs. Digi International
Performance |
| Timeline |
| Postal Realty Trust |
| Digi International |
Postal Realty and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and Digi International
The main advantage of trading using opposite Postal Realty and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.| Postal Realty vs. Office Properties Income | Postal Realty vs. SL Green Realty | Postal Realty vs. Highwoods Properties | Postal Realty vs. Equity Commonwealth |
| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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