Correlation Between CITY OFFICE and Heidelberg Pharma

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

Diversification Opportunities for CITY OFFICE and Heidelberg Pharma

0.0

Correlation Coefficient

CITY OFFICE  Heidelberg Pharma

Pay attention - limited upside

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

Pair Corralation between CITY OFFICE and Heidelberg Pharma

If you would invest (100.00) in Heidelberg Pharma AG on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Heidelberg Pharma AG 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.  Heidelberg Pharma AG

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Heidelberg Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heidelberg Pharma AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Heidelberg Pharma is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CITY OFFICE and Heidelberg Pharma

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

The idea behind CITY OFFICE REIT and Heidelberg Pharma AG 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.