Correlation Between City Office and Gaming Leisure
Can any of the company-specific risk be diversified away by investing in both City Office and Gaming Leisure 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 Gaming Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Office and Gaming Leisure Properties, you can compare the effects of market volatilities on City Office and Gaming Leisure 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 Gaming Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Office and Gaming Leisure.
Diversification Opportunities for City Office and Gaming Leisure
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Gaming is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding City Office and Gaming Leisure Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Leisure Properties 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 are associated (or correlated) with Gaming Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Leisure Properties has no effect on the direction of City Office i.e., City Office and Gaming Leisure go up and down completely randomly.
Pair Corralation between City Office and Gaming Leisure
Considering the 90-day investment horizon City Office is expected to generate 2.69 times more return on investment than Gaming Leisure. However, City Office is 2.69 times more volatile than Gaming Leisure Properties. It trades about 0.07 of its potential returns per unit of risk. Gaming Leisure Properties is currently generating about 0.14 per unit of risk. If you would invest 473.00 in City Office on August 30, 2024 and sell it today you would earn a total of 99.00 from holding City Office or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Office vs. Gaming Leisure Properties
Performance |
| Timeline |
| City Office |
| Gaming Leisure Properties |
City Office and Gaming Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Office and Gaming Leisure
The main advantage of trading using opposite City Office and Gaming Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Office position performs unexpectedly, Gaming Leisure 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 Gaming Leisure will offset losses from the drop in Gaming Leisure's long position.| City Office vs. Hudson Pacific Properties | City Office vs. Piedmont Office Realty | City Office vs. Office Properties Income | City Office vs. Kilroy Realty Corp |
| Gaming Leisure vs. VICI Properties | Gaming Leisure vs. Brixmor Property | Gaming Leisure vs. Sabra Healthcare REIT | Gaming Leisure vs. CubeSmart |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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