Correlation Between VIVA WINE and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and CITY OFFICE REIT, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and CITY OFFICE.
Diversification Opportunities for VIVA WINE and CITY OFFICE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIVA and CITY is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP 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 VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and CITY OFFICE go up and down completely randomly.
Pair Corralation between VIVA WINE and CITY OFFICE
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 1.3 times more return on investment than CITY OFFICE. However, VIVA WINE is 1.3 times more volatile than CITY OFFICE REIT. It trades about 0.06 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.02 per unit of risk. If you would invest 168.00 in VIVA WINE GROUP on August 27, 2024 and sell it today you would earn a total of 175.00 from holding VIVA WINE GROUP or generate 104.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. CITY OFFICE REIT
Performance |
| Timeline |
| VIVA WINE GROUP |
| CITY OFFICE REIT |
VIVA WINE and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and CITY OFFICE
The main advantage of trading using opposite VIVA WINE and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.| VIVA WINE vs. National Health Investors | VIVA WINE vs. YOOMA WELLNESS INC | VIVA WINE vs. EHEALTH | VIVA WINE vs. SIDETRADE EO 1 |
| CITY OFFICE vs. Universal Display | CITY OFFICE vs. Citic Telecom International | CITY OFFICE vs. ANTA SPORTS PRODUCT | CITY OFFICE vs. VIAPLAY GROUP AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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