Correlation Between DigitalBridge and Curbline Properties

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

By analyzing existing cross correlation between DigitalBridge Group and Curbline Properties Corp, you can compare the effects of market volatilities on DigitalBridge and Curbline Properties 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 DigitalBridge with a short position of Curbline Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of DigitalBridge and Curbline Properties.

Diversification Opportunities for DigitalBridge and Curbline Properties

-0.34

Correlation Coefficient

DigitalBridge  Curbline Properties

Very good diversification

The 3 months correlation between DigitalBridge and Curbline is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding DigitalBridge Group and Curbline Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curbline Properties Corp and DigitalBridge 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 DigitalBridge Group are associated (or correlated) with Curbline Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curbline Properties Corp has no effect on the direction of DigitalBridge i.e., DigitalBridge and Curbline Properties go up and down completely randomly.

Pair Corralation between DigitalBridge and Curbline Properties

Assuming the 90 days trading horizon DigitalBridge is expected to generate 3.86 times less return on investment than Curbline Properties. But when comparing it to its historical volatility, DigitalBridge Group is 2.52 times less risky than Curbline Properties. It trades about 0.08 of its potential returns per unit of risk. Curbline Properties Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,985  in Curbline Properties Corp on September 12, 2024 and sell it today you would earn a total of  410.00  from holding Curbline Properties Corp or generate 20.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	10.93%
Values	Daily Returns

DigitalBridge Group  vs.  Curbline Properties Corp

DigitalBridge Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalBridge Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, DigitalBridge is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Curbline Properties Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Curbline Properties Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Curbline Properties sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DigitalBridge and Curbline Properties

The main advantage of trading using opposite DigitalBridge and Curbline Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DigitalBridge position performs unexpectedly, Curbline Properties 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 Curbline Properties will offset losses from the drop in Curbline Properties' long position.

The idea behind DigitalBridge Group and Curbline Properties Corp 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.