Correlation Between CTO Realty and PS Business
Can any of the company-specific risk be diversified away by investing in both CTO Realty and PS Business 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 CTO Realty and PS Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and PS Business Parks, you can compare the effects of market volatilities on CTO Realty and PS Business 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 CTO Realty with a short position of PS Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and PS Business.
Diversification Opportunities for CTO Realty and PS Business
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CTO and PSBZP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and PS Business Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS Business Parks and CTO Realty 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 CTO Realty Growth are associated (or correlated) with PS Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS Business Parks has no effect on the direction of CTO Realty i.e., CTO Realty and PS Business go up and down completely randomly.
Pair Corralation between CTO Realty and PS Business
Assuming the 90 days trading horizon CTO Realty is expected to generate 3.44 times less return on investment than PS Business. But when comparing it to its historical volatility, CTO Realty Growth is 1.95 times less risky than PS Business. It trades about 0.03 of its potential returns per unit of risk. PS Business Parks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,101 in PS Business Parks on October 9, 2024 and sell it today you would earn a total of 234.00 from holding PS Business Parks or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 26.22% |
| Values | Daily Returns |
CTO Realty Growth vs. PS Business Parks
Performance |
| Timeline |
| CTO Realty Growth |
| PS Business Parks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CTO Realty and PS Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and PS Business
The main advantage of trading using opposite CTO Realty and PS Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, PS Business 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 PS Business will offset losses from the drop in PS Business' long position.| CTO Realty vs. City Office REIT | CTO Realty vs. Armada Hoffler Properties | CTO Realty vs. Digital Realty Trust | CTO Realty vs. Global Net Lease |
| PS Business vs. Kulicke and Soffa | PS Business vs. ASE Industrial Holding | PS Business vs. FormFactor | PS Business vs. Entegris |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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