Correlation Between Orion Office and Office Properties
Can any of the company-specific risk be diversified away by investing in both Orion 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 Orion 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 Orion Office Reit and Office Properties Income, you can compare the effects of market volatilities on Orion 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 Orion Office with a short position of Office Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orion Office and Office Properties.
Diversification Opportunities for Orion Office and Office Properties
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orion and Office is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Orion Office Reit 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 Orion 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 Orion Office Reit 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 Orion Office i.e., Orion Office and Office Properties go up and down completely randomly.
Pair Corralation between Orion Office and Office Properties
Considering the 90-day investment horizon Orion Office Reit is expected to generate 0.56 times more return on investment than Office Properties. However, Orion Office Reit is 1.8 times less risky than Office Properties. It trades about -0.03 of its potential returns per unit of risk. Office Properties Income is currently generating about -0.05 per unit of risk. If you would invest 785.00 in Orion Office Reit on September 3, 2024 and sell it today you would lose (362.00) from holding Orion Office Reit or give up 46.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orion Office Reit vs. Office Properties Income
Performance |
| Timeline |
| Orion Office Reit |
| Office Properties Income |
Orion Office and Office Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orion Office and Office Properties
The main advantage of trading using opposite Orion Office and Office Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orion 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.| Orion Office vs. Office Properties Income | Orion Office vs. SL Green Realty | Orion Office vs. Highwoods Properties | Orion Office vs. Equity Commonwealth |
| Office Properties vs. Kilroy Realty Corp | Office Properties vs. Highwoods Properties | Office Properties vs. Cousins Properties Incorporated | Office Properties vs. City Office |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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