Correlation Between Vornado Realty and DigitalBridge
Can any of the company-specific risk be diversified away by investing in both Vornado Realty and DigitalBridge 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 Vornado Realty and DigitalBridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vornado Realty Trust and DigitalBridge Group, you can compare the effects of market volatilities on Vornado Realty and DigitalBridge 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 Vornado Realty with a short position of DigitalBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vornado Realty and DigitalBridge.
Diversification Opportunities for Vornado Realty and DigitalBridge
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vornado and DigitalBridge is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Vornado Realty Trust and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and Vornado 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 Vornado Realty Trust are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Vornado Realty i.e., Vornado Realty and DigitalBridge go up and down completely randomly.
Pair Corralation between Vornado Realty and DigitalBridge
Assuming the 90 days trading horizon Vornado Realty Trust is expected to generate 1.35 times more return on investment than DigitalBridge. However, Vornado Realty is 1.35 times more volatile than DigitalBridge Group. It trades about -0.06 of its potential returns per unit of risk. DigitalBridge Group is currently generating about -0.14 per unit of risk. If you would invest 1,527 in Vornado Realty Trust on January 27, 2025 and sell it today you would lose (74.00) from holding Vornado Realty Trust or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vornado Realty Trust vs. DigitalBridge Group
Performance |
| Timeline |
| Vornado Realty Trust |
| DigitalBridge Group |
Vornado Realty and DigitalBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vornado Realty and DigitalBridge
The main advantage of trading using opposite Vornado Realty and DigitalBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vornado Realty position performs unexpectedly, DigitalBridge 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 DigitalBridge will offset losses from the drop in DigitalBridge's long position.| Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Vornado Realty Trust | Vornado Realty vs. Hudson Pacific Properties |
| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. Global Net Lease | DigitalBridge vs. Chimera Investment | DigitalBridge vs. Cherry Hill Mortgage |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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