Correlation Between CITY OFFICE and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and CHINA HUARONG 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on CITY OFFICE and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and CHINA HUARONG.
Diversification Opportunities for CITY OFFICE and CHINA HUARONG
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and CHINA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and CHINA HUARONG go up and down completely randomly.
Pair Corralation between CITY OFFICE and CHINA HUARONG
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 0.28 times more return on investment than CHINA HUARONG. However, CITY OFFICE REIT is 3.57 times less risky than CHINA HUARONG. It trades about 0.1 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about -0.01 per unit of risk. If you would invest 480.00 in CITY OFFICE REIT on September 13, 2024 and sell it today you would earn a total of 55.00 from holding CITY OFFICE REIT or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| CITY OFFICE REIT |
| CHINA HUARONG ENERHD |
CITY OFFICE and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and CHINA HUARONG
The main advantage of trading using opposite CITY OFFICE and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG'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 |
| CHINA HUARONG vs. WILLIS LEASE FIN | CHINA HUARONG vs. SAFETY MEDICAL PROD | CHINA HUARONG vs. AVITA Medical | CHINA HUARONG vs. CarsalesCom |
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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