Correlation Between CITY OFFICE and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on CITY OFFICE and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Lamar Advertising.
Diversification Opportunities for CITY OFFICE and Lamar Advertising
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITY and Lamar is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Lamar Advertising go up and down completely randomly.
Pair Corralation between CITY OFFICE and Lamar Advertising
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 2.39 times more return on investment than Lamar Advertising. However, CITY OFFICE is 2.39 times more volatile than Lamar Advertising. It trades about 0.07 of its potential returns per unit of risk. Lamar Advertising is currently generating about 0.12 per unit of risk. If you would invest 486.00 in CITY OFFICE REIT on September 3, 2024 and sell it today you would earn a total of 39.00 from holding CITY OFFICE REIT or generate 8.02% 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. Lamar Advertising
Performance |
| Timeline |
| CITY OFFICE REIT |
| Lamar Advertising |
CITY OFFICE and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Lamar Advertising
The main advantage of trading using opposite CITY OFFICE and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
| Lamar Advertising vs. CITY OFFICE REIT | Lamar Advertising vs. Infrastrutture Wireless Italiane | Lamar Advertising vs. CENTURIA OFFICE REIT | Lamar Advertising vs. Transportadora de Gas |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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