Correlation Between SPORTING and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both SPORTING 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 SPORTING and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and CITY OFFICE REIT, you can compare the effects of market volatilities on SPORTING 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 SPORTING with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and CITY OFFICE.
Diversification Opportunities for SPORTING and CITY OFFICE
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORTING and CITY is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING 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 SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and CITY OFFICE go up and down completely randomly.
Pair Corralation between SPORTING and CITY OFFICE
Assuming the 90 days trading horizon SPORTING is expected to under-perform the CITY OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, SPORTING is 3.72 times less risky than CITY OFFICE. The stock trades about -0.18 of its potential returns per unit of risk. The CITY OFFICE REIT is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 446.00 in CITY OFFICE REIT on September 21, 2024 and sell it today you would earn a total of 54.00 from holding CITY OFFICE REIT or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. CITY OFFICE REIT
Performance |
| Timeline |
| SPORTING |
| CITY OFFICE REIT |
SPORTING and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and CITY OFFICE
The main advantage of trading using opposite SPORTING and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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.The idea behind SPORTING and CITY OFFICE REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB | CITY OFFICE vs. Norsk Hydro ASA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |