Correlation Between Digital Realty and Helios Towers

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Can any of the company-specific risk be diversified away by investing in both Digital Realty and Helios Towers 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 Digital Realty and Helios Towers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Realty Trust and Helios Towers Plc, you can compare the effects of market volatilities on Digital Realty and Helios Towers 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 Digital Realty with a short position of Helios Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Realty and Helios Towers.

Diversification Opportunities for Digital Realty and Helios Towers

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Digital and Helios is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Digital Realty Trust and Helios Towers Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Towers Plc and Digital 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 Digital Realty Trust are associated (or correlated) with Helios Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Towers Plc has no effect on the direction of Digital Realty i.e., Digital Realty and Helios Towers go up and down completely randomly.

Pair Corralation between Digital Realty and Helios Towers

Assuming the 90 days trading horizon Digital Realty Trust is expected to generate 0.86 times more return on investment than Helios Towers. However, Digital Realty Trust is 1.17 times less risky than Helios Towers. It trades about 0.18 of its potential returns per unit of risk. Helios Towers Plc is currently generating about 0.13 per unit of risk. If you would invest  15,885  in Digital Realty Trust on April 25, 2025 and sell it today you would earn a total of  1,979  from holding Digital Realty Trust or generate 12.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.41%
ValuesDaily Returns

Digital Realty Trust  vs.  Helios Towers Plc

 Performance 
       Timeline  
Digital Realty Trust 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Digital Realty Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Digital Realty may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Helios Towers Plc 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Helios Towers Plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Helios Towers may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Digital Realty and Helios Towers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Digital Realty and Helios Towers

The main advantage of trading using opposite Digital Realty and Helios Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Realty position performs unexpectedly, Helios Towers 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 Helios Towers will offset losses from the drop in Helios Towers' long position.
The idea behind Digital Realty Trust and Helios Towers Plc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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