Correlation Between CITY OFFICE and CN RAILWAY

Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and CN RAILWAY 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 CITY OFFICE and CN RAILWAY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CITY OFFICE REIT and CN RAILWAY S, you can compare the effects of market volatilities on CITY OFFICE and CN RAILWAY 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 CITY OFFICE with a short position of CN RAILWAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and CN RAILWAY.

Diversification Opportunities for CITY OFFICE and CN RAILWAY

0.0

Correlation Coefficient

CITY OFFICE  CN RAILWAY

Pay attention - limited upside

The 3 months correlation between CITY and 4FF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and CN RAILWAY S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN RAILWAY S and CITY OFFICE 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 CITY OFFICE REIT are associated (or correlated) with CN RAILWAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN RAILWAY S has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and CN RAILWAY go up and down completely randomly.

Pair Corralation between CITY OFFICE and CN RAILWAY

If you would invest (100.00) in CN RAILWAY S on December 17, 2024 and sell it today you would earn a total of  100.00  from holding CN RAILWAY S or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CITY OFFICE REIT  vs.  CN RAILWAY S

CITY OFFICE REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days CITY OFFICE REIT 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.

CN RAILWAY S

Risk-Adjusted Performance

Very Weak

Over the last 90 days CN RAILWAY S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CN RAILWAY is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CITY OFFICE and CN RAILWAY

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

The idea behind CITY OFFICE REIT and CN RAILWAY S 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.