Correlation Between Equinix and DigitalBridge

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

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

Diversification Opportunities for Equinix and DigitalBridge

-0.44

Correlation Coefficient

Equinix  DigitalBridge

Very good diversification

The 3 months correlation between Equinix and DigitalBridge is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and Equinix 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 Equinix are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Equinix i.e., Equinix and DigitalBridge go up and down completely randomly.

Pair Corralation between Equinix and DigitalBridge

Given the investment horizon of 90 days Equinix is expected to under-perform the DigitalBridge. In addition to that, Equinix is 1.79 times more volatile than DigitalBridge Group. It trades about -0.05 of its total potential returns per unit of risk. DigitalBridge Group is currently generating about 0.07 per unit of volatility. If you would invest  2,104  in DigitalBridge Group on April 30, 2025 and sell it today you would earn a total of  97.00  from holding DigitalBridge Group or generate 4.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Equinix  vs.  DigitalBridge Group

Equinix

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equinix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

DigitalBridge Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalBridge Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, DigitalBridge is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Equinix and DigitalBridge

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

The idea behind Equinix and DigitalBridge Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.