Correlation Between Empire State and City Office
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and City Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and City Office REIT, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of City Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and City Office.
Diversification Opportunities for Empire State and City Office
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and City is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty 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 Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and City Office go up and down completely randomly.
Pair Corralation between Empire State and City Office
Given the investment horizon of 90 days Empire State Realty is expected to generate 2.47 times more return on investment than City Office. However, Empire State is 2.47 times more volatile than City Office REIT. It trades about 0.05 of its potential returns per unit of risk. City Office REIT is currently generating about 0.01 per unit of risk. If you would invest 745.00 in Empire State Realty on August 27, 2024 and sell it today you would earn a total of 340.00 from holding Empire State Realty or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.44% |
| Values | Daily Returns |
Empire State Realty vs. City Office REIT
Performance |
| Timeline |
| Empire State Realty |
| City Office REIT |
Empire State and City Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and City Office
The main advantage of trading using opposite Empire State and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Empire State Realty | Empire State vs. City Office | Empire State vs. Cousins Properties Incorporated | Empire State vs. Postal Realty Trust |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |