Correlation Between Great Portland and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Great Portland 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 Great Portland and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Portland Estates and CITY OFFICE REIT, you can compare the effects of market volatilities on Great Portland 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 Great Portland with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Portland and CITY OFFICE.
Diversification Opportunities for Great Portland and CITY OFFICE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and CITY is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Great Portland Estates 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 Great Portland 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 Great Portland Estates 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 Great Portland i.e., Great Portland and CITY OFFICE go up and down completely randomly.
Pair Corralation between Great Portland and CITY OFFICE
Assuming the 90 days trading horizon Great Portland Estates is expected to generate 1.13 times more return on investment than CITY OFFICE. However, Great Portland is 1.13 times more volatile than CITY OFFICE REIT. It trades about 0.1 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.08 per unit of risk. If you would invest 349.00 in Great Portland Estates on April 23, 2025 and sell it today you would earn a total of 45.00 from holding Great Portland Estates or generate 12.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Great Portland Estates vs. CITY OFFICE REIT
Performance |
Timeline |
Great Portland Estates |
CITY OFFICE REIT |
Great Portland and CITY OFFICE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Great Portland and CITY OFFICE
The main advantage of trading using opposite Great Portland and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Portland 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.Great Portland vs. BACKBONE Technology AG | Great Portland vs. CHINA TONTINE WINES | Great Portland vs. ITALIAN WINE BRANDS | Great Portland vs. Sun Life Financial |
CITY OFFICE vs. INDOFOOD AGRI RES | CITY OFFICE vs. GWILLI FOOD | CITY OFFICE vs. Cal Maine Foods | CITY OFFICE vs. Astral Foods Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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