Correlation Between CITY OFFICE and NAKED WINES
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and NAKED WINES 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 NAKED WINES 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 NAKED WINES PLC, you can compare the effects of market volatilities on CITY OFFICE and NAKED WINES 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 NAKED WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and NAKED WINES.
Diversification Opportunities for CITY OFFICE and NAKED WINES
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and NAKED is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and NAKED WINES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAKED WINES PLC 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 NAKED WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAKED WINES PLC has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and NAKED WINES go up and down completely randomly.
Pair Corralation between CITY OFFICE and NAKED WINES
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 0.71 times more return on investment than NAKED WINES. However, CITY OFFICE REIT is 1.41 times less risky than NAKED WINES. It trades about -0.02 of its potential returns per unit of risk. NAKED WINES PLC is currently generating about -0.03 per unit of risk. If you would invest 520.00 in CITY OFFICE REIT on November 1, 2024 and sell it today you would lose (10.00) from holding CITY OFFICE REIT or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. NAKED WINES PLC
Performance |
| Timeline |
| CITY OFFICE REIT |
| NAKED WINES PLC |
CITY OFFICE and NAKED WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and NAKED WINES
The main advantage of trading using opposite CITY OFFICE and NAKED WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, NAKED WINES 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 NAKED WINES will offset losses from the drop in NAKED WINES's long position.| CITY OFFICE vs. Japan Post Insurance | CITY OFFICE vs. Zurich Insurance Group | CITY OFFICE vs. BII Railway Transportation | CITY OFFICE vs. Broadcom |
| NAKED WINES vs. CHRYSALIS INVESTMENTS LTD | NAKED WINES vs. FIRST SAVINGS FINL | NAKED WINES vs. CITY OFFICE REIT | NAKED WINES vs. CENTURIA OFFICE REIT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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