Correlation Between CREMECOMTRSBI and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both CREMECOMTRSBI 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 CREMECOMTRSBI and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CREMECOMTRSBI DL 001 and CITY OFFICE REIT, you can compare the effects of market volatilities on CREMECOMTRSBI 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 CREMECOMTRSBI with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREMECOMTRSBI and CITY OFFICE.
Diversification Opportunities for CREMECOMTRSBI and CITY OFFICE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREMECOMTRSBI and CITY is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CREMECOMTRSBI DL 001 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 CREMECOMTRSBI 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 CREMECOMTRSBI DL 001 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 CREMECOMTRSBI i.e., CREMECOMTRSBI and CITY OFFICE go up and down completely randomly.
Pair Corralation between CREMECOMTRSBI and CITY OFFICE
Assuming the 90 days trading horizon CREMECOMTRSBI DL 001 is expected to generate 7.01 times more return on investment than CITY OFFICE. However, CREMECOMTRSBI is 7.01 times more volatile than CITY OFFICE REIT. It trades about 0.23 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about -0.06 per unit of risk. If you would invest 116.00 in CREMECOMTRSBI DL 001 on October 23, 2024 and sell it today you would earn a total of 54.00 from holding CREMECOMTRSBI DL 001 or generate 46.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CREMECOMTRSBI DL 001 vs. CITY OFFICE REIT
Performance |
| Timeline |
| CREMECOMTRSBI DL 001 |
| CITY OFFICE REIT |
CREMECOMTRSBI and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREMECOMTRSBI and CITY OFFICE
The main advantage of trading using opposite CREMECOMTRSBI and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREMECOMTRSBI 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.| CREMECOMTRSBI vs. Boston Properties | CREMECOMTRSBI vs. COUSINS PTIES INC | CREMECOMTRSBI vs. Great Portland Estates | CREMECOMTRSBI vs. Easterly Government Properties |
| CITY OFFICE vs. AGNC INVESTMENT | CITY OFFICE vs. SOGECLAIR SA INH | CITY OFFICE vs. HK Electric Investments | CITY OFFICE vs. Virtus Investment Partners |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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