Correlation Between Office Properties and One Liberty
Can any of the company-specific risk be diversified away by investing in both Office Properties and One Liberty 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 One Liberty 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 One Liberty Properties, you can compare the effects of market volatilities on Office Properties and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Office Properties and One Liberty.
Diversification Opportunities for Office Properties and One Liberty
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Office and One is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Office Properties i.e., Office Properties and One Liberty go up and down completely randomly.
Pair Corralation between Office Properties and One Liberty
Considering the 90-day investment horizon Office Properties Income is expected to under-perform the One Liberty. In addition to that, Office Properties is 4.11 times more volatile than One Liberty Properties. It trades about -0.02 of its total potential returns per unit of risk. One Liberty Properties is currently generating about 0.16 per unit of volatility. If you would invest 2,273 in One Liberty Properties on September 1, 2024 and sell it today you would earn a total of 734.00 from holding One Liberty Properties or generate 32.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Office Properties Income vs. One Liberty Properties
Performance |
| Timeline |
| Office Properties Income |
| One Liberty Properties |
Office Properties and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Office Properties and One Liberty
The main advantage of trading using opposite Office Properties and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty's long position.| Office Properties vs. Hudson Pacific Properties | Office Properties vs. Piedmont Office Realty | Office Properties vs. City Office | Office Properties vs. Kilroy Realty Corp |
| One Liberty vs. Douglas Emmett | One Liberty vs. Vornado Realty Trust | One Liberty vs. Highwoods Properties | One Liberty vs. Piedmont Office Realty |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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