Correlation Between CITY OFFICE and Public Storage
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on CITY OFFICE and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and Public Storage.
Diversification Opportunities for CITY OFFICE and Public Storage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CITY and Public is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Public Storage go up and down completely randomly.
Pair Corralation between CITY OFFICE and Public Storage
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the Public Storage. In addition to that, CITY OFFICE is 1.43 times more volatile than Public Storage. It trades about -0.24 of its total potential returns per unit of risk. Public Storage is currently generating about 0.02 per unit of volatility. If you would invest 31,310 in Public Storage on August 25, 2024 and sell it today you would earn a total of 180.00 from holding Public Storage or generate 0.57% 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. Public Storage
Performance |
| Timeline |
| CITY OFFICE REIT |
| Public Storage |
CITY OFFICE and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and Public Storage
The main advantage of trading using opposite CITY OFFICE and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
| Public Storage vs. Apollo Medical Holdings | Public Storage vs. Sqs Software Quality | Public Storage vs. VITEC SOFTWARE GROUP | Public Storage vs. CVR Medical Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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