Correlation Between COFCO Joycome and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome 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 COFCO Joycome and CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and CITY OFFICE REIT, you can compare the effects of market volatilities on COFCO Joycome 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 COFCO Joycome with a short position of CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and CITY OFFICE.
Diversification Opportunities for COFCO Joycome and CITY OFFICE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COFCO and CITY is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods 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 COFCO Joycome 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 COFCO Joycome Foods 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 COFCO Joycome i.e., COFCO Joycome and CITY OFFICE go up and down completely randomly.
Pair Corralation between COFCO Joycome and CITY OFFICE
Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 1.23 times more return on investment than CITY OFFICE. However, COFCO Joycome is 1.23 times more volatile than CITY OFFICE REIT. It trades about 0.06 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about 0.01 per unit of risk. If you would invest 14.00 in COFCO Joycome Foods on December 10, 2024 and sell it today you would earn a total of 3.00 from holding COFCO Joycome Foods or generate 21.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
COFCO Joycome Foods vs. CITY OFFICE REIT
Performance |
Timeline |
COFCO Joycome Foods |
CITY OFFICE REIT |
COFCO Joycome and CITY OFFICE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COFCO Joycome and CITY OFFICE
The main advantage of trading using opposite COFCO Joycome and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome 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.COFCO Joycome vs. Caseys General Stores | COFCO Joycome vs. Coor Service Management | COFCO Joycome vs. Cleanaway Waste Management | COFCO Joycome vs. FAST RETAIL ADR |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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