Correlation Between Cousins Properties and City Office
Can any of the company-specific risk be diversified away by investing in both Cousins Properties and City 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 Cousins Properties and City Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cousins Properties Incorporated and City Office REIT, you can compare the effects of market volatilities on Cousins Properties and City 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 Cousins Properties with a short position of City Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cousins Properties and City Office.
Diversification Opportunities for Cousins Properties and City Office
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cousins and City is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate and City Office REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office REIT and Cousins Properties 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 Cousins Properties Incorporated are associated (or correlated) with City Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Office REIT has no effect on the direction of Cousins Properties i.e., Cousins Properties and City Office go up and down completely randomly.
Pair Corralation between Cousins Properties and City Office
Considering the 90-day investment horizon Cousins Properties is expected to generate 2.07 times less return on investment than City Office. But when comparing it to its historical volatility, Cousins Properties Incorporated is 1.09 times less risky than City Office. It trades about 0.08 of its potential returns per unit of risk. City Office REIT is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,810 in City Office REIT on August 27, 2024 and sell it today you would earn a total of 73.00 from holding City Office REIT or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cousins Properties Incorporate vs. City Office REIT
Performance |
| Timeline |
| Cousins Properties |
| City Office REIT |
Cousins Properties and City Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cousins Properties and City Office
The main advantage of trading using opposite Cousins Properties and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cousins Properties position performs unexpectedly, City 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 City Office will offset losses from the drop in City Office's long position.| Cousins Properties vs. Highwoods Properties | Cousins Properties vs. Douglas Emmett | Cousins Properties vs. Equity Commonwealth | Cousins Properties vs. Kilroy Realty Corp |
| City Office vs. Cousins Properties Incorporated | City Office vs. Franklin Street Properties | City Office vs. Creative Media Community | City Office vs. Vornado Realty Trust |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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