Correlation Between CITY OFFICE and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining PLC, you can compare the effects of market volatilities on CITY OFFICE and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Endeavour Mining.
Diversification Opportunities for CITY OFFICE and Endeavour Mining
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and Endeavour is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Endeavour Mining go up and down completely randomly.
Pair Corralation between CITY OFFICE and Endeavour Mining
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.25 times more return on investment than Endeavour Mining. However, CITY OFFICE is 1.25 times more volatile than Endeavour Mining PLC. It trades about 0.04 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about 0.01 per unit of risk. If you would invest 387.00 in CITY OFFICE REIT on October 16, 2024 and sell it today you would earn a total of 118.00 from holding CITY OFFICE REIT or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. Endeavour Mining PLC
Performance |
| Timeline |
| CITY OFFICE REIT |
| Endeavour Mining PLC |
CITY OFFICE and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Endeavour Mining
The main advantage of trading using opposite CITY OFFICE and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| CITY OFFICE vs. Nok Airlines PCL | CITY OFFICE vs. Astral Foods Limited | CITY OFFICE vs. Performance Food Group | CITY OFFICE vs. JAPAN AIRLINES |
| Endeavour Mining vs. CITY OFFICE REIT | Endeavour Mining vs. Mitsui Chemicals | Endeavour Mining vs. Corporate Office Properties | Endeavour Mining vs. X FAB Silicon Foundries |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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