Correlation Between CITY OFFICE and Alstria Office
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on CITY OFFICE and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Alstria Office.
Diversification Opportunities for CITY OFFICE and Alstria Office
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CITY and Alstria is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Alstria Office go up and down completely randomly.
Pair Corralation between CITY OFFICE and Alstria Office
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.74 times more return on investment than Alstria Office. However, CITY OFFICE is 1.74 times more volatile than alstria office REIT AG. It trades about 0.16 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.25 per unit of risk. If you would invest 446.00 in CITY OFFICE REIT on September 21, 2024 and sell it today you would earn a total of 54.00 from holding CITY OFFICE REIT or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. alstria office REIT AG
Performance |
| Timeline |
| CITY OFFICE REIT |
| alstria office REIT |
CITY OFFICE and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Alstria Office
The main advantage of trading using opposite CITY OFFICE and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB | CITY OFFICE vs. Norsk Hydro ASA |
| Alstria Office vs. Ribbon Communications | Alstria Office vs. Live Nation Entertainment | Alstria Office vs. Cogent Communications Holdings | Alstria Office vs. Iridium Communications |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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