Correlation Between CITY OFFICE and Haier Smart
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on CITY OFFICE and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Haier Smart.
Diversification Opportunities for CITY OFFICE and Haier Smart
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITY and Haier is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Haier Smart go up and down completely randomly.
Pair Corralation between CITY OFFICE and Haier Smart
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the Haier Smart. In addition to that, CITY OFFICE is 1.53 times more volatile than Haier Smart Home. It trades about -0.08 of its total potential returns per unit of risk. Haier Smart Home is currently generating about 0.05 per unit of volatility. If you would invest 178.00 in Haier Smart Home on October 11, 2024 and sell it today you would earn a total of 2.00 from holding Haier Smart Home or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CITY OFFICE REIT vs. Haier Smart Home
Performance |
| Timeline |
| CITY OFFICE REIT |
| Haier Smart Home |
CITY OFFICE and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Haier Smart
The main advantage of trading using opposite CITY OFFICE and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| CITY OFFICE vs. Tradeweb Markets | CITY OFFICE vs. CARSALESCOM | CITY OFFICE vs. Tower Semiconductor | CITY OFFICE vs. ELMOS SEMICONDUCTOR |
| Haier Smart vs. American Homes 4 | Haier Smart vs. ADDUS HOMECARE | Haier Smart vs. GREENX METALS LTD | Haier Smart 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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