Correlation Between CITY OFFICE and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on CITY OFFICE and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and DATANG INTL.
Diversification Opportunities for CITY OFFICE and DATANG INTL
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITY and DATANG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and DATANG INTL go up and down completely randomly.
Pair Corralation between CITY OFFICE and DATANG INTL
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 0.79 times more return on investment than DATANG INTL. However, CITY OFFICE REIT is 1.27 times less risky than DATANG INTL. It trades about 0.12 of its potential returns per unit of risk. DATANG INTL POW is currently generating about 0.09 per unit of risk. If you would invest 484.00 in CITY OFFICE REIT on September 27, 2024 and sell it today you would earn a total of 36.00 from holding CITY OFFICE REIT or generate 7.44% 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. DATANG INTL POW
Performance |
| Timeline |
| CITY OFFICE REIT |
| DATANG INTL POW |
CITY OFFICE and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and DATANG INTL
The main advantage of trading using opposite CITY OFFICE and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Great Portland Estates | CITY OFFICE vs. Easterly Government Properties |
| DATANG INTL vs. Cogent Communications Holdings | DATANG INTL vs. CITY OFFICE REIT | DATANG INTL vs. KRISPY KREME DL 01 | DATANG INTL vs. Singapore Telecommunications Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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