Correlation Between Corporate Office and Gaming
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Gaming 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 Corporate Office and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and Gaming and Leisure, you can compare the effects of market volatilities on Corporate Office and Gaming 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 Corporate Office with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Gaming.
Diversification Opportunities for Corporate Office and Gaming
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and Gaming is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and Corporate 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 Corporate Office Properties are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Corporate Office i.e., Corporate Office and Gaming go up and down completely randomly.
Pair Corralation between Corporate Office and Gaming
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the Gaming. In addition to that, Corporate Office is 1.03 times more volatile than Gaming and Leisure. It trades about -0.22 of its total potential returns per unit of risk. Gaming and Leisure is currently generating about -0.15 per unit of volatility. If you would invest 4,735 in Gaming and Leisure on October 17, 2024 and sell it today you would lose (189.00) from holding Gaming and Leisure or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Corporate Office Properties vs. Gaming and Leisure
Performance |
| Timeline |
| Corporate Office Pro |
| Gaming and Leisure |
Corporate Office and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Gaming
The main advantage of trading using opposite Corporate Office and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Corporate Office vs. betterU Education Corp | Corporate Office vs. CHINA EDUCATION GROUP | Corporate Office vs. Tower One Wireless | Corporate Office vs. BJs Wholesale Club |
| Gaming vs. DFS Furniture PLC | Gaming vs. Corporate Office Properties | Gaming vs. CAIRN HOMES EO | Gaming vs. OFFICE DEPOT |
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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