Correlation Between Iron Mountain and Digital Realty

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and Digital Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Digital Realty Trust, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Digital Realty.

Diversification Opportunities for Iron Mountain and Digital Realty

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Iron and Digital is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated 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 Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Digital Realty go up and down completely randomly.

Pair Corralation between Iron Mountain and Digital Realty

Considering the 90-day investment horizon Iron Mountain Incorporated is expected to generate 0.99 times more return on investment than Digital Realty. However, Iron Mountain Incorporated is 1.01 times less risky than Digital Realty. It trades about 0.24 of its potential returns per unit of risk. Digital Realty Trust is currently generating about 0.13 per unit of risk. If you would invest  7,340  in Iron Mountain Incorporated on December 29, 2023 and sell it today you would earn a total of  674.00  from holding Iron Mountain Incorporated or generate 9.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Iron Mountain Incorporated  vs.  Digital Realty Trust

 Performance 
       Timeline  
Iron Mountain rporated 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Iron Mountain Incorporated are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Iron Mountain displayed solid returns over the last few months and may actually be approaching a breakup point.
Digital Realty Trust 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Digital Realty Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, Digital Realty may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Iron Mountain and Digital Realty Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Iron Mountain and Digital Realty

The main advantage of trading using opposite Iron Mountain and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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 Iron Mountain Incorporated 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Bonds Directory
Find actively traded corporate debentures issued by US companies
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance