Correlation Between CITY OFFICE and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and REINET INVESTMENTS 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 REINET INVESTMENTS 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 REINET INVESTMENTS SCA, you can compare the effects of market volatilities on CITY OFFICE and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and REINET INVESTMENTS.
Diversification Opportunities for CITY OFFICE and REINET INVESTMENTS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and REINET is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between CITY OFFICE and REINET INVESTMENTS
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.06 times more return on investment than REINET INVESTMENTS. However, CITY OFFICE is 1.06 times more volatile than REINET INVESTMENTS SCA. It trades about 0.06 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.04 per unit of risk. If you would invest 414.00 in CITY OFFICE REIT on September 3, 2024 and sell it today you would earn a total of 111.00 from holding CITY OFFICE REIT or generate 26.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. REINET INVESTMENTS SCA
Performance |
| Timeline |
| CITY OFFICE REIT |
| REINET INVESTMENTS SCA |
CITY OFFICE and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and REINET INVESTMENTS
The main advantage of trading using opposite CITY OFFICE and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. COUSINS PTIES INC | CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 |
| REINET INVESTMENTS vs. NIPPON STEEL SPADR | REINET INVESTMENTS vs. Broadcom | REINET INVESTMENTS vs. CECO ENVIRONMENTAL | REINET INVESTMENTS vs. TEXAS ROADHOUSE |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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