Correlation Between Office Properties and Great Portland
Can any of the company-specific risk be diversified away by investing in both Office Properties and Great Portland 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 Office Properties and Great Portland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Office Properties Income and Great Portland Estates, you can compare the effects of market volatilities on Office Properties and Great Portland 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 Office Properties with a short position of Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Office Properties and Great Portland.
Diversification Opportunities for Office Properties and Great Portland
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Office and Great is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates and Office 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 Office Properties Income are associated (or correlated) with Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of Office Properties i.e., Office Properties and Great Portland go up and down completely randomly.
Pair Corralation between Office Properties and Great Portland
Assuming the 90 days trading horizon Office Properties Income is expected to under-perform the Great Portland. In addition to that, Office Properties is 1.41 times more volatile than Great Portland Estates. It trades about -0.19 of its total potential returns per unit of risk. Great Portland Estates is currently generating about -0.24 per unit of volatility. If you would invest 342.00 in Great Portland Estates on October 24, 2024 and sell it today you would lose (26.00) from holding Great Portland Estates or give up 7.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Office Properties Income vs. Great Portland Estates
Performance |
| Timeline |
| Office Properties Income |
| Great Portland Estates |
Office Properties and Great Portland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Office Properties and Great Portland
The main advantage of trading using opposite Office Properties and Great Portland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties position performs unexpectedly, Great Portland 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 Great Portland will offset losses from the drop in Great Portland's long position.| Office Properties vs. Boston Properties | Office Properties vs. COUSINS PTIES INC | Office Properties vs. Great Portland Estates | Office Properties vs. Easterly Government Properties |
| Great Portland vs. Boston Properties | Great Portland vs. COUSINS PTIES INC | Great Portland vs. Easterly Government Properties | Great Portland vs. Office Properties Income |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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