Correlation Between CITY OFFICE and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on CITY OFFICE and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and DEUTSCHE WOHNEN.
Diversification Opportunities for CITY OFFICE and DEUTSCHE WOHNEN
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CITY and DEUTSCHE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 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 DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between CITY OFFICE and DEUTSCHE WOHNEN
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the DEUTSCHE WOHNEN. In addition to that, CITY OFFICE is 1.32 times more volatile than DEUTSCHE WOHNEN ADRS12. It trades about 0.0 of its total potential returns per unit of risk. DEUTSCHE WOHNEN ADRS12 is currently generating about 0.01 per unit of volatility. If you would invest 1,105 in DEUTSCHE WOHNEN ADRS12 on October 14, 2024 and sell it today you would lose (25.00) from holding DEUTSCHE WOHNEN ADRS12 or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| CITY OFFICE REIT |
| DEUTSCHE WOHNEN ADRS12 |
CITY OFFICE and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and DEUTSCHE WOHNEN
The main advantage of trading using opposite CITY OFFICE and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN's long position.| CITY OFFICE vs. GEELY AUTOMOBILE | CITY OFFICE vs. Summit Materials | CITY OFFICE vs. NEWELL RUBBERMAID | CITY OFFICE vs. Materialise NV |
| DEUTSCHE WOHNEN vs. CITY OFFICE REIT | DEUTSCHE WOHNEN vs. URBAN OUTFITTERS | DEUTSCHE WOHNEN vs. Shenandoah Telecommunications | DEUTSCHE WOHNEN vs. 24SEVENOFFICE GROUP 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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