Correlation Between CITY OFFICE and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and AM EAGLE 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 AM EAGLE 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 AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on CITY OFFICE and AM EAGLE 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 AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and AM EAGLE.
Diversification Opportunities for CITY OFFICE and AM EAGLE
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITY and AFG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS 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 AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and AM EAGLE go up and down completely randomly.
Pair Corralation between CITY OFFICE and AM EAGLE
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.05 times more return on investment than AM EAGLE. However, CITY OFFICE is 1.05 times more volatile than AM EAGLE OUTFITTERS. It trades about 0.05 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about -0.11 per unit of risk. If you would invest 488.00 in CITY OFFICE REIT on September 29, 2024 and sell it today you would earn a total of 32.00 from holding CITY OFFICE REIT or generate 6.56% 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. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| CITY OFFICE REIT |
| AM EAGLE OUTFITTERS |
CITY OFFICE and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and AM EAGLE
The main advantage of trading using opposite CITY OFFICE and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| CITY OFFICE vs. Hochschild Mining plc | CITY OFFICE vs. SINGAPORE AIRLINES | CITY OFFICE vs. GAMING FAC SA | CITY OFFICE vs. International Game Technology |
| AM EAGLE vs. PennantPark Investment | AM EAGLE vs. SLR Investment Corp | AM EAGLE vs. CITY OFFICE REIT | AM EAGLE vs. Japan Asia Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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