Correlation Between CITY OFFICE and Brinker International

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

Diversification Opportunities for CITY OFFICE and Brinker International

0.0

Correlation Coefficient

CITY OFFICE  Brinker International

Pay attention - limited upside

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

Pair Corralation between CITY OFFICE and Brinker International

If you would invest  500.00  in CITY OFFICE REIT on October 24, 2024 and sell it today you would earn a total of  5.00  from holding CITY OFFICE REIT or generate 1.0% 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.  Brinker International

CITY OFFICE REIT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITY OFFICE REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CITY OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Brinker International

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker International are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brinker International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITY OFFICE and Brinker International

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

The idea behind CITY OFFICE REIT and Brinker International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.