Correlation Between CHINA HUARONG and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both CHINA HUARONG 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 CHINA HUARONG and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA HUARONG ENERHD 50 and CITY OFFICE REIT, you can compare the effects of market volatilities on CHINA HUARONG 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 CHINA HUARONG with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA HUARONG and CITY OFFICE.
Diversification Opportunities for CHINA HUARONG and CITY OFFICE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHINA and CITY is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CHINA HUARONG ENERHD 50 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50 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 CHINA HUARONG i.e., CHINA HUARONG and CITY OFFICE go up and down completely randomly.
Pair Corralation between CHINA HUARONG and CITY OFFICE
Assuming the 90 days trading horizon CHINA HUARONG ENERHD 50 is expected to under-perform the CITY OFFICE. In addition to that, CHINA HUARONG is 3.57 times more volatile than CITY OFFICE REIT. It trades about -0.01 of its total potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.1 per unit of volatility. If you would invest 480.00 in CITY OFFICE REIT on September 13, 2024 and sell it today you would earn a total of 55.00 from holding CITY OFFICE REIT or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA HUARONG ENERHD 50 vs. CITY OFFICE REIT
Performance |
| Timeline |
| CHINA HUARONG ENERHD |
| CITY OFFICE REIT |
CHINA HUARONG and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA HUARONG and CITY OFFICE
The main advantage of trading using opposite CHINA HUARONG and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA HUARONG 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.| CHINA HUARONG vs. WILLIS LEASE FIN | CHINA HUARONG vs. SAFETY MEDICAL PROD | CHINA HUARONG vs. AVITA Medical | CHINA HUARONG vs. CarsalesCom |
| CITY OFFICE vs. Office Properties Income | CITY OFFICE vs. CREMECOMTRSBI DL 001 | CITY OFFICE vs. Superior Plus Corp | CITY OFFICE vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |