Correlation Between VICI Properties and Digital Realty
Can any of the company-specific risk be diversified away by investing in both VICI Properties 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 VICI Properties and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and Digital Realty Trust, you can compare the effects of market volatilities on VICI Properties 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 VICI Properties with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Digital Realty.
Diversification Opportunities for VICI Properties and Digital Realty
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VICI and Digital is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties 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 VICI Properties 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 VICI Properties 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 VICI Properties i.e., VICI Properties and Digital Realty go up and down completely randomly.
Pair Corralation between VICI Properties and Digital Realty
Given the investment horizon of 90 days VICI Properties is expected to under-perform the Digital Realty. But the stock apears to be less risky and, when comparing its historical volatility, VICI Properties is 1.57 times less risky than Digital Realty. The stock trades about -0.01 of its potential returns per unit of risk. The Digital Realty Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 18,331 in Digital Realty Trust on August 27, 2024 and sell it today you would earn a total of 653.00 from holding Digital Realty Trust or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VICI Properties vs. Digital Realty Trust
Performance |
| Timeline |
| VICI Properties |
| Digital Realty Trust |
VICI Properties and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and Digital Realty
The main advantage of trading using opposite VICI Properties and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties 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.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
| Digital Realty vs. Crown Castle | Digital Realty vs. American Tower Corp | Digital Realty vs. Iron Mountain Incorporated | Digital Realty vs. Hannon Armstrong Sustainable |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |