Correlation Between Office Properties and FIRSTCASH

Can any of the company-specific risk be diversified away by investing in both Office Properties and FIRSTCASH 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 FIRSTCASH 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 FIRSTCASH INC 4625, you can compare the effects of market volatilities on Office Properties and FIRSTCASH 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 FIRSTCASH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Office Properties and FIRSTCASH.

Diversification Opportunities for Office Properties and FIRSTCASH

0.16

Correlation Coefficient

Office Properties  FIRSTCASH

Average diversification

The 3 months correlation between Office and FIRSTCASH is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and FIRSTCASH INC 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRSTCASH INC 4625 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 FIRSTCASH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRSTCASH INC 4625 has no effect on the direction of Office Properties i.e., Office Properties and FIRSTCASH go up and down completely randomly.

Pair Corralation between Office Properties and FIRSTCASH

Assuming the 90 days horizon Office Properties Income is expected to under-perform the FIRSTCASH. In addition to that, Office Properties is 9.67 times more volatile than FIRSTCASH INC 4625. It trades about -0.1 of its total potential returns per unit of risk. FIRSTCASH INC 4625 is currently generating about 0.03 per unit of volatility. If you would invest  9,464  in FIRSTCASH INC 4625 on December 24, 2024 and sell it today you would earn a total of  36.00  from holding FIRSTCASH INC 4625 or generate 0.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

Office Properties Income  vs.  FIRSTCASH INC 4625

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 unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

FIRSTCASH INC 4625

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIRSTCASH INC 4625 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, FIRSTCASH is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Office Properties and FIRSTCASH

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

The idea behind Office Properties Income and FIRSTCASH INC 4625 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.