Correlation Between CITY OFFICE and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on CITY OFFICE and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and PARKEN Sport.
Diversification Opportunities for CITY OFFICE and PARKEN Sport
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CITY and PARKEN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and PARKEN Sport go up and down completely randomly.
Pair Corralation between CITY OFFICE and PARKEN Sport
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.6 times more return on investment than PARKEN Sport. However, CITY OFFICE is 1.6 times more volatile than PARKEN Sport Entertainment. It trades about 0.16 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.13 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| CITY OFFICE REIT |
| PARKEN Sport Enterta |
CITY OFFICE and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and PARKEN Sport
The main advantage of trading using opposite CITY OFFICE and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport'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 |
| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. SIVERS SEMICONDUCTORS AB |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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