Correlation Between Wheeler Real and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Wheeler Real 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 Wheeler Real and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheeler Real Estate and Digital Realty Trust, you can compare the effects of market volatilities on Wheeler Real 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 Wheeler Real with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheeler Real and Digital Realty.
Diversification Opportunities for Wheeler Real and Digital Realty
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wheeler and Digital is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wheeler Real Estate 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 Wheeler Real 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 Wheeler Real Estate 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 Wheeler Real i.e., Wheeler Real and Digital Realty go up and down completely randomly.
Pair Corralation between Wheeler Real and Digital Realty
Given the investment horizon of 90 days Wheeler Real Estate is expected to under-perform the Digital Realty. In addition to that, Wheeler Real is 2.84 times more volatile than Digital Realty Trust. It trades about -0.74 of its total potential returns per unit of risk. Digital Realty Trust is currently generating about 0.34 per unit of volatility. If you would invest 17,600 in Digital Realty Trust on September 2, 2024 and sell it today you would earn a total of 1,969 from holding Digital Realty Trust or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheeler Real Estate vs. Digital Realty Trust
Performance |
| Timeline |
| Wheeler Real Estate |
| Digital Realty Trust |
Wheeler Real and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheeler Real and Digital Realty
The main advantage of trading using opposite Wheeler Real and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheeler Real 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.| Wheeler Real vs. Federal Realty Investment | Wheeler Real vs. National Retail Properties | Wheeler Real vs. Kimco Realty |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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