Correlation Between TRAINLINE PLC and Corporate Office

Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Corporate 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 TRAINLINE PLC and Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRAINLINE PLC LS and Corporate Office Properties, you can compare the effects of market volatilities on TRAINLINE PLC and Corporate 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 TRAINLINE PLC with a short position of Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Corporate Office.

Diversification Opportunities for TRAINLINE PLC and Corporate Office

0.92

Correlation Coefficient

TRAINLINE PLC  Corporate Office

Almost no diversification

The 3 months correlation between TRAINLINE and Corporate is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Corporate Office go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and Corporate Office

Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 2.05 times more return on investment than Corporate Office. However, TRAINLINE PLC is 2.05 times more volatile than Corporate Office Properties. It trades about 0.02 of its potential returns per unit of risk. Corporate Office Properties is currently generating about -0.01 per unit of risk. If you would invest  354.00  in TRAINLINE PLC LS on December 10, 2024 and sell it today you would earn a total of  4.00  from holding TRAINLINE PLC LS or generate 1.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

TRAINLINE PLC LS  vs.  Corporate Office Properties

TRAINLINE PLC LS

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRAINLINE PLC LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Corporate Office Pro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporate Office Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TRAINLINE PLC and Corporate Office

The main advantage of trading using opposite TRAINLINE PLC and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, Corporate 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 Corporate Office will offset losses from the drop in Corporate Office's long position.

The idea behind TRAINLINE PLC LS and Corporate Office Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.