Correlation Between Elbit Imaging and Digital Realty

Can any of the company-specific risk be diversified away by investing in both Elbit Imaging 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 Elbit Imaging and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elbit Imaging and Digital Realty Trust, you can compare the effects of market volatilities on Elbit Imaging 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 Elbit Imaging with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elbit Imaging and Digital Realty.

Diversification Opportunities for Elbit Imaging and Digital Realty

0.0

Correlation Coefficient

Elbit Imaging  Digital Realty

Pay attention - limited upside

The 3 months correlation between Elbit and Digital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging i.e., Elbit Imaging and Digital Realty go up and down completely randomly.

Pair Corralation between Elbit Imaging and Digital Realty

If you would invest (100.00) in Elbit Imaging on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Elbit Imaging or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elbit Imaging  vs.  Digital Realty Trust

Elbit Imaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elbit Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elbit Imaging is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Digital Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digital Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Digital Realty is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Elbit Imaging and Digital Realty

The main advantage of trading using opposite Elbit Imaging and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging 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.

The idea behind Elbit Imaging and Digital Realty Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.