Correlation Between Empire State and Digitalbridge

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

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

Diversification Opportunities for Empire State and Digitalbridge

0.61

Correlation Coefficient

Empire State  Digitalbridge

Poor diversification

The 3 months correlation between Empire and Digitalbridge is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Digitalbridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digitalbridge Group and Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Digitalbridge go up and down completely randomly.

Pair Corralation between Empire State and Digitalbridge

Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Digitalbridge. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 3.32 times less risky than Digitalbridge. The stock trades about -0.1 of its potential returns per unit of risk. The Digitalbridge Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,139  in Digitalbridge Group on September 8, 2025 and sell it today you would earn a total of  273.00  from holding Digitalbridge Group or generate 23.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Empire State Realty  vs.  Digitalbridge Group

Empire State Realty

Risk-Adjusted Performance

Weakest

Over the last 90 days Empire State Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Digitalbridge Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Digitalbridge Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Digitalbridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Empire State and Digitalbridge

The main advantage of trading using opposite Empire State and Digitalbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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 Empire State Realty 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.