Correlation Between CITY OFFICE and FRACTAL GAMING

Can any of the company-specific risk be diversified away by investing in both CITY OFFICE and FRACTAL GAMING 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 FRACTAL GAMING 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 FRACTAL GAMING GROUP, you can compare the effects of market volatilities on CITY OFFICE and FRACTAL GAMING 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 FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and FRACTAL GAMING.

Diversification Opportunities for CITY OFFICE and FRACTAL GAMING

-0.35

Correlation Coefficient

CITY OFFICE  FRACTAL GAMING

Very good diversification

The 3 months correlation between CITY and FRACTAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between CITY OFFICE and FRACTAL GAMING

Assuming the 90 days horizon CITY OFFICE is expected to generate 23.33 times less return on investment than FRACTAL GAMING. But when comparing it to its historical volatility, CITY OFFICE REIT is 1.08 times less risky than FRACTAL GAMING. It trades about 0.01 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  270.00  in FRACTAL GAMING GROUP on October 10, 2024 and sell it today you would earn a total of  30.00  from holding FRACTAL GAMING GROUP or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CITY OFFICE REIT  vs.  FRACTAL GAMING GROUP

CITY OFFICE REIT

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CITY OFFICE REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CITY OFFICE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FRACTAL GAMING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CITY OFFICE and FRACTAL GAMING

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

The idea behind CITY OFFICE REIT and FRACTAL GAMING GROUP 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.