Correlation Between Power REIT and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Power REIT 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 Power REIT and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Digital Realty Trust, you can compare the effects of market volatilities on Power REIT 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 Power REIT with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Digital Realty.
Diversification Opportunities for Power REIT and Digital Realty
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Digital is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT 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 Power REIT 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 Power REIT 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 Power REIT i.e., Power REIT and Digital Realty go up and down completely randomly.
Pair Corralation between Power REIT and Digital Realty
Allowing for the 90-day total investment horizon Power REIT is expected to generate 10.63 times more return on investment than Digital Realty. However, Power REIT is 10.63 times more volatile than Digital Realty Trust. It trades about 0.01 of its potential returns per unit of risk. Digital Realty Trust is currently generating about 0.05 per unit of risk. If you would invest 415.00 in Power REIT on August 28, 2024 and sell it today you would lose (308.00) from holding Power REIT or give up 74.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Digital Realty Trust
Performance |
| Timeline |
| Power REIT |
| Digital Realty Trust |
Power REIT and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Digital Realty
The main advantage of trading using opposite Power REIT and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT 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.| Power REIT vs. Broadstone Net Lease | Power REIT vs. Armada Hflr Pr | Power REIT vs. Brightspire Capital | Power REIT vs. Safehold |
| Digital Realty vs. EPR Properties | Digital Realty vs. Digital Realty Trust | Digital Realty vs. Gladstone Land Corp | Digital Realty vs. EPR Properties |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |