Correlation Between Office Properties and CREMETRSBI DL-001

Can any of the company-specific risk be diversified away by investing in both Office Properties and CREMETRSBI DL-001 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 Office Properties and CREMETRSBI DL-001 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Office Properties Income and CREMECOMTRSBI DL 001, you can compare the effects of market volatilities on Office Properties and CREMETRSBI DL-001 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 Office Properties with a short position of CREMETRSBI DL-001. Check out your portfolio center. Please also check ongoing floating volatility patterns of Office Properties and CREMETRSBI DL-001.

Diversification Opportunities for Office Properties and CREMETRSBI DL-001

-0.02

Correlation Coefficient

Office Properties  CREMETRSBI DL-001

Good diversification

The 3 months correlation between Office and CREMETRSBI is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and CREMECOMTRSBI DL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREMECOMTRSBI DL 001 and Office Properties 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 Office Properties Income are associated (or correlated) with CREMETRSBI DL-001. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREMECOMTRSBI DL 001 has no effect on the direction of Office Properties i.e., Office Properties and CREMETRSBI DL-001 go up and down completely randomly.

Pair Corralation between Office Properties and CREMETRSBI DL-001

Assuming the 90 days trading horizon Office Properties Income is expected to under-perform the CREMETRSBI DL-001. In addition to that, Office Properties is 1.67 times more volatile than CREMECOMTRSBI DL 001. It trades about -0.05 of its total potential returns per unit of risk. CREMECOMTRSBI DL 001 is currently generating about 0.04 per unit of volatility. If you would invest  161.00  in CREMECOMTRSBI DL 001 on December 27, 2024 and sell it today you would earn a total of  9.00  from holding CREMECOMTRSBI DL 001 or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.03%
Values	Daily Returns

Office Properties Income  vs.  CREMECOMTRSBI DL 001

Office Properties Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Office Properties Income 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 forward-looking signals 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.

CREMECOMTRSBI DL 001

Risk-Adjusted Performance

Insignificant

Over the last 90 days CREMECOMTRSBI DL 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, CREMETRSBI DL-001 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Office Properties and CREMETRSBI DL-001

The main advantage of trading using opposite Office Properties and CREMETRSBI DL-001 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties position performs unexpectedly, CREMETRSBI DL-001 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 CREMETRSBI DL-001 will offset losses from the drop in CREMETRSBI DL-001's long position.

The idea behind Office Properties Income and CREMECOMTRSBI DL 001 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.