Correlation Between CITY OFFICE and New York
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and New York 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 New York 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 New York Community, you can compare the effects of market volatilities on CITY OFFICE and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and New York.
Diversification Opportunities for CITY OFFICE and New York
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITY and New is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and New York go up and down completely randomly.
Pair Corralation between CITY OFFICE and New York
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the New York. But the stock apears to be less risky and, when comparing its historical volatility, CITY OFFICE REIT is 1.22 times less risky than New York. The stock trades about -0.02 of its potential returns per unit of risk. The New York Community is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 855.00 in New York Community on October 25, 2024 and sell it today you would earn a total of 65.00 from holding New York Community or generate 7.6% 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. New York Community
Performance |
| Timeline |
| CITY OFFICE REIT |
| New York Community |
CITY OFFICE and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and New York
The main advantage of trading using opposite CITY OFFICE and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| CITY OFFICE vs. Semiconductor Manufacturing International | CITY OFFICE vs. MagnaChip Semiconductor Corp | CITY OFFICE vs. APPLIED MATERIALS | CITY OFFICE vs. BE Semiconductor Industries |
| New York vs. The Trade Desk | New York vs. TRADEDOUBLER AB SK | New York vs. Salesforce | New York vs. LINMON MEDIA LTD |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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