Correlation Between Kaufman Broad and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Kaufman Broad 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 Kaufman Broad and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Broad SA and CITY OFFICE REIT, you can compare the effects of market volatilities on Kaufman Broad 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 Kaufman Broad with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and CITY OFFICE.
Diversification Opportunities for Kaufman Broad and CITY OFFICE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kaufman and CITY is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA 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 Kaufman Broad 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 Kaufman Broad SA 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 Kaufman Broad i.e., Kaufman Broad and CITY OFFICE go up and down completely randomly.
Pair Corralation between Kaufman Broad and CITY OFFICE
Assuming the 90 days horizon Kaufman Broad is expected to generate 4.61 times less return on investment than CITY OFFICE. But when comparing it to its historical volatility, Kaufman Broad SA is 2.36 times less risky than CITY OFFICE. It trades about 0.03 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 488.00 in CITY OFFICE REIT on September 24, 2024 and sell it today you would earn a total of 17.00 from holding CITY OFFICE REIT or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaufman Broad SA vs. CITY OFFICE REIT
Performance |
| Timeline |
| Kaufman Broad SA |
| CITY OFFICE REIT |
Kaufman Broad and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Broad and CITY OFFICE
The main advantage of trading using opposite Kaufman Broad and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad 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.| Kaufman Broad vs. OURGAME INTHOLDL 00005 | Kaufman Broad vs. TROPHY GAMES DEV | Kaufman Broad vs. URBAN OUTFITTERS | Kaufman Broad vs. GigaMedia |
| CITY OFFICE vs. ECHO INVESTMENT ZY | CITY OFFICE vs. PUBLIC STORAGE PRFO | CITY OFFICE vs. DATANG INTL POW | CITY OFFICE vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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