Correlation Between REDSUN PROPERTIES and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both REDSUN PROPERTIES and CITY OFFICE 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 REDSUN PROPERTIES and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REDSUN PROPERTIES GROUP and CITY OFFICE REIT, you can compare the effects of market volatilities on REDSUN PROPERTIES and CITY OFFICE 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 REDSUN PROPERTIES with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDSUN PROPERTIES and CITY OFFICE.
Diversification Opportunities for REDSUN PROPERTIES and CITY OFFICE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between REDSUN and CITY is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding REDSUN PROPERTIES GROUP and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT and REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP are associated (or correlated) with CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of REDSUN PROPERTIES i.e., REDSUN PROPERTIES and CITY OFFICE go up and down completely randomly.
Pair Corralation between REDSUN PROPERTIES and CITY OFFICE
Assuming the 90 days horizon REDSUN PROPERTIES GROUP is expected to generate 17.08 times more return on investment than CITY OFFICE. However, REDSUN PROPERTIES is 17.08 times more volatile than CITY OFFICE REIT. It trades about 0.15 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.05 per unit of risk. If you would invest 0.10 in REDSUN PROPERTIES GROUP on September 2, 2024 and sell it today you would earn a total of 0.10 from holding REDSUN PROPERTIES GROUP or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REDSUN PROPERTIES GROUP vs. CITY OFFICE REIT
Performance |
| Timeline |
| REDSUN PROPERTIES |
| CITY OFFICE REIT |
REDSUN PROPERTIES and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REDSUN PROPERTIES and CITY OFFICE
The main advantage of trading using opposite REDSUN PROPERTIES and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REDSUN PROPERTIES position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| REDSUN PROPERTIES vs. SBA Communications Corp | REDSUN PROPERTIES vs. Verizon Communications | REDSUN PROPERTIES vs. Cogent Communications Holdings | REDSUN PROPERTIES vs. GREENX METALS LTD |
| CITY OFFICE vs. GRUPO CARSO A1 | CITY OFFICE vs. PLAYTECH | CITY OFFICE vs. PLAY2CHILL SA ZY | CITY OFFICE vs. Grupo Carso SAB |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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