Correlation Between City Office and Corporate Office
Can any of the company-specific risk be diversified away by investing in both City Office and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on City Office and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Office and Corporate Office.
Diversification Opportunities for City Office and Corporate Office
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Corporate is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding City Office REIT and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of City Office i.e., City Office and Corporate Office go up and down completely randomly.
Pair Corralation between City Office and Corporate Office
Assuming the 90 days trading horizon City Office REIT is expected to generate 1.03 times more return on investment than Corporate Office. However, City Office is 1.03 times more volatile than Corporate Office Properties. It trades about 0.01 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.0 per unit of risk. If you would invest 1,874 in City Office REIT on August 27, 2024 and sell it today you would earn a total of 9.00 from holding City Office REIT or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 25.71% |
| Values | Daily Returns |
City Office REIT vs. Corporate Office Properties
Performance |
| Timeline |
| City Office REIT |
| Corporate Office Pro |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
City Office and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Office and Corporate Office
The main advantage of trading using opposite City Office and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Office position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| City Office vs. Cousins Properties Incorporated | City Office vs. Franklin Street Properties | City Office vs. Creative Media Community | City Office vs. Vornado Realty Trust |
| Corporate Office vs. Highwoods Properties | Corporate Office vs. Piedmont Office Realty | Corporate Office vs. Douglas Emmett | Corporate Office vs. Kilroy Realty Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |