Correlation Between Urban Outfitters and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters 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 Urban Outfitters and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and CITY OFFICE REIT, you can compare the effects of market volatilities on Urban Outfitters 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 Urban Outfitters with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and CITY OFFICE.
Diversification Opportunities for Urban Outfitters and CITY OFFICE
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Urban and CITY is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters 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 Urban Outfitters 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 Urban Outfitters 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 Urban Outfitters i.e., Urban Outfitters and CITY OFFICE go up and down completely randomly.
Pair Corralation between Urban Outfitters and CITY OFFICE
Assuming the 90 days horizon Urban Outfitters is expected to generate 0.92 times more return on investment than CITY OFFICE. However, Urban Outfitters is 1.09 times less risky than CITY OFFICE. It trades about 0.16 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about -0.2 per unit of risk. If you would invest 5,000 in Urban Outfitters on October 17, 2024 and sell it today you would earn a total of 300.00 from holding Urban Outfitters or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. CITY OFFICE REIT
Performance |
| Timeline |
| Urban Outfitters |
| CITY OFFICE REIT |
Urban Outfitters and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and CITY OFFICE
The main advantage of trading using opposite Urban Outfitters and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters 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.| Urban Outfitters vs. NorAm Drilling AS | Urban Outfitters vs. DAIRY FARM INTL | Urban Outfitters vs. IMPERIAL TOBACCO | Urban Outfitters vs. Thai Beverage Public |
| CITY OFFICE vs. PNC Financial Services | CITY OFFICE vs. American Eagle Outfitters | CITY OFFICE vs. BOS BETTER ONLINE | CITY OFFICE vs. Urban Outfitters |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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