Correlation Between PARKEN Sport and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and CITY OFFICE REIT, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and CITY OFFICE.
Diversification Opportunities for PARKEN Sport and CITY OFFICE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PARKEN and CITY is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment 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 PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and CITY OFFICE go up and down completely randomly.
Pair Corralation between PARKEN Sport and CITY OFFICE
Assuming the 90 days horizon PARKEN Sport is expected to generate 2.04 times less return on investment than CITY OFFICE. But when comparing it to its historical volatility, PARKEN Sport Entertainment is 1.6 times less risky than CITY OFFICE. It trades about 0.13 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 446.00 in CITY OFFICE REIT on September 21, 2024 and sell it today you would earn a total of 54.00 from holding CITY OFFICE REIT or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. CITY OFFICE REIT
Performance |
| Timeline |
| PARKEN Sport Enterta |
| CITY OFFICE REIT |
PARKEN Sport and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and CITY OFFICE
The main advantage of trading using opposite PARKEN Sport and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. SIVERS SEMICONDUCTORS AB |
| CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB | CITY OFFICE vs. Norsk Hydro ASA |
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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