Correlation Between KENEDIX OFFICE and Office Properties
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and Office Properties 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 KENEDIX OFFICE and Office Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Office Properties Income, you can compare the effects of market volatilities on KENEDIX OFFICE and Office Properties 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 KENEDIX OFFICE with a short position of Office Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Office Properties.
Diversification Opportunities for KENEDIX OFFICE and Office Properties
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KENEDIX and Office is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Office Properties Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Office Properties Income and KENEDIX 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 KENEDIX OFFICE INV are associated (or correlated) with Office Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Office Properties Income has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and Office Properties go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Office Properties
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.18 times more return on investment than Office Properties. However, KENEDIX OFFICE INV is 5.41 times less risky than Office Properties. It trades about 0.01 of its potential returns per unit of risk. Office Properties Income is currently generating about -0.16 per unit of risk. If you would invest 88,000 in KENEDIX OFFICE INV on August 25, 2024 and sell it today you would earn a total of 0.00 from holding KENEDIX OFFICE INV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Office Properties Income
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Office Properties Income |
KENEDIX OFFICE and Office Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Office Properties
The main advantage of trading using opposite KENEDIX OFFICE and Office Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, Office Properties 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 Office Properties will offset losses from the drop in Office Properties' long position.| KENEDIX OFFICE vs. Xenia Hotels Resorts | KENEDIX OFFICE vs. AEGEAN AIRLINES | KENEDIX OFFICE vs. MIRAMAR HOTEL INV | KENEDIX OFFICE vs. MHP Hotel AG |
| Office Properties vs. CDN IMPERIAL BANK | Office Properties vs. Quaker Chemical | Office Properties vs. Sanyo Chemical Industries | Office Properties vs. TIANDE CHEMICAL |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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