Correlation Between CITY OFFICE and WINMARK
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and WINMARK 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 WINMARK 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 WINMARK, you can compare the effects of market volatilities on CITY OFFICE and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and WINMARK.
Diversification Opportunities for CITY OFFICE and WINMARK
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITY and WINMARK is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and WINMARK go up and down completely randomly.
Pair Corralation between CITY OFFICE and WINMARK
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.39 times more return on investment than WINMARK. However, CITY OFFICE is 1.39 times more volatile than WINMARK. It trades about 0.29 of its potential returns per unit of risk. WINMARK is currently generating about 0.02 per unit of risk. If you would invest 442.00 in CITY OFFICE REIT on September 14, 2024 and sell it today you would earn a total of 93.00 from holding CITY OFFICE REIT or generate 21.04% 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. WINMARK
Performance |
| Timeline |
| CITY OFFICE REIT |
| WINMARK |
CITY OFFICE and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and WINMARK
The main advantage of trading using opposite CITY OFFICE and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB |
| WINMARK vs. TERADATA | WINMARK vs. DOCDATA | WINMARK vs. Gaztransport Technigaz SA | WINMARK vs. Cass Information Systems |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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