Correlation Between Corporate Office and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Corporate Office 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 Corporate Office and CITY OFFICE 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 CITY OFFICE REIT, you can compare the effects of market volatilities on Corporate Office 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 Corporate Office with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and CITY OFFICE.
Diversification Opportunities for Corporate Office and CITY OFFICE
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and CITY is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties 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 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 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 Corporate Office i.e., Corporate Office and CITY OFFICE go up and down completely randomly.
Pair Corralation between Corporate Office and CITY OFFICE
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the CITY OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 1.97 times less risky than CITY OFFICE. The stock trades about -0.42 of its potential returns per unit of risk. The CITY OFFICE REIT is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 470.00 in CITY OFFICE REIT on November 27, 2024 and sell it today you would earn a total of 0.00 from holding CITY OFFICE REIT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. CITY OFFICE REIT
Performance |
| Timeline |
| Corporate Office Pro |
| CITY OFFICE REIT |
Corporate Office and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and CITY OFFICE
The main advantage of trading using opposite Corporate Office and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office 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.| Corporate Office vs. KENEDIX OFFICE INV | Corporate Office vs. CENTURIA OFFICE REIT | Corporate Office vs. ATRESMEDIA | Corporate Office vs. Live Nation Entertainment |
| CITY OFFICE vs. Gol Intelligent Airlines | CITY OFFICE vs. Daito Trust Construction | CITY OFFICE vs. SOUTHWEST AIRLINES | CITY OFFICE vs. JAPAN AIRLINES |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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