Correlation Between CITY OFFICE and CREMECOMTRSBI
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and CREMECOMTRSBI 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 CREMECOMTRSBI 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 CREMECOMTRSBI DL 001, you can compare the effects of market volatilities on CITY OFFICE and CREMECOMTRSBI 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 CREMECOMTRSBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and CREMECOMTRSBI.
Diversification Opportunities for CITY OFFICE and CREMECOMTRSBI
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CITY and CREMECOMTRSBI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and CREMECOMTRSBI DL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREMECOMTRSBI DL 001 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 CREMECOMTRSBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREMECOMTRSBI DL 001 has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and CREMECOMTRSBI go up and down completely randomly.
Pair Corralation between CITY OFFICE and CREMECOMTRSBI
Assuming the 90 days horizon CITY OFFICE is expected to generate 29.09 times less return on investment than CREMECOMTRSBI. But when comparing it to its historical volatility, CITY OFFICE REIT is 22.19 times less risky than CREMECOMTRSBI. It trades about 0.1 of its potential returns per unit of risk. CREMECOMTRSBI DL 001 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 53.00 in CREMECOMTRSBI DL 001 on September 13, 2024 and sell it today you would lose (33.00) from holding CREMECOMTRSBI DL 001 or give up 62.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. CREMECOMTRSBI DL 001
Performance |
| Timeline |
| CITY OFFICE REIT |
| CREMECOMTRSBI DL 001 |
CITY OFFICE and CREMECOMTRSBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and CREMECOMTRSBI
The main advantage of trading using opposite CITY OFFICE and CREMECOMTRSBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, CREMECOMTRSBI 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 CREMECOMTRSBI will offset losses from the drop in CREMECOMTRSBI's long position.| CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB |
| CREMECOMTRSBI vs. Office Properties Income | CREMECOMTRSBI vs. CITY OFFICE REIT | CREMECOMTRSBI vs. Superior Plus Corp | CREMECOMTRSBI vs. SIVERS SEMICONDUCTORS AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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