Correlation Between CITY OFFICE and Chegg
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Chegg 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 CITY OFFICE and Chegg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and Chegg Inc, you can compare the effects of market volatilities on CITY OFFICE and Chegg 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 CITY OFFICE with a short position of Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Chegg.
Diversification Opportunities for CITY OFFICE and Chegg
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITY and Chegg is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc and CITY OFFICE 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 CITY OFFICE REIT are associated (or correlated) with Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Chegg go up and down completely randomly.
Pair Corralation between CITY OFFICE and Chegg
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 0.5 times more return on investment than Chegg. However, CITY OFFICE REIT is 2.0 times less risky than Chegg. It trades about -0.01 of its potential returns per unit of risk. Chegg Inc is currently generating about -0.32 per unit of risk. If you would invest 525.00 in CITY OFFICE REIT on October 13, 2024 and sell it today you would lose (5.00) from holding CITY OFFICE REIT or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. Chegg Inc
Performance |
| Timeline |
| CITY OFFICE REIT |
| Chegg Inc |
CITY OFFICE and Chegg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Chegg
The main advantage of trading using opposite CITY OFFICE and Chegg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Chegg 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 Chegg will offset losses from the drop in Chegg's long position.| CITY OFFICE vs. Great Portland Estates | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
| Chegg vs. Zoom Video Communications | Chegg vs. Urban Outfitters | Chegg vs. UNIVMUSIC GRPADR050 | Chegg vs. CITY OFFICE REIT |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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