Correlation Between CITY OFFICE and TREECOM
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and TREECOM 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 TREECOM 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 TREECOM, you can compare the effects of market volatilities on CITY OFFICE and TREECOM 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 TREECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and TREECOM.
Diversification Opportunities for CITY OFFICE and TREECOM
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CITY and TREECOM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM 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 TREECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and TREECOM go up and down completely randomly.
Pair Corralation between CITY OFFICE and TREECOM
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the TREECOM. But the stock apears to be less risky and, when comparing its historical volatility, CITY OFFICE REIT is 1.57 times less risky than TREECOM. The stock trades about -0.02 of its potential returns per unit of risk. The TREECOM is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,747 in TREECOM on October 25, 2024 and sell it today you would earn a total of 477.00 from holding TREECOM or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CITY OFFICE REIT vs. TREECOM
Performance |
| Timeline |
| CITY OFFICE REIT |
| TREECOM |
CITY OFFICE and TREECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and TREECOM
The main advantage of trading using opposite CITY OFFICE and TREECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, TREECOM 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 TREECOM will offset losses from the drop in TREECOM'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 |
| TREECOM vs. Molson Coors Beverage | TREECOM vs. BROADWIND ENRGY | TREECOM vs. United Breweries Co | TREECOM vs. BII Railway Transportation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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