Correlation Between Site Centers and City Office

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

By analyzing existing cross correlation between Site Centers Corp and City Office, you can compare the effects of market volatilities on Site Centers and City Office 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 Site Centers with a short position of City Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Site Centers and City Office.

Diversification Opportunities for Site Centers and City Office

0.46

Correlation Coefficient

Site Centers  City Office

Very weak diversification

The 3 months correlation between Site and City is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Site Centers Corp and City Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office and Site Centers 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 Site Centers Corp are associated (or correlated) with City Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Office has no effect on the direction of Site Centers i.e., Site Centers and City Office go up and down completely randomly.

Pair Corralation between Site Centers and City Office

Given the investment horizon of 90 days Site Centers Corp is expected to under-perform the City Office. But the etf apears to be less risky and, when comparing its historical volatility, Site Centers Corp is 1.31 times less risky than City Office. The etf trades about -0.16 of its potential returns per unit of risk. The City Office is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  535.00  in City Office on December 26, 2024 and sell it today you would lose (23.00) from holding City Office or give up 4.3% of portfolio value over 90 days.

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

Site Centers Corp  vs.  City Office

Site Centers Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Site Centers Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

City Office

Risk-Adjusted Performance

Very Weak

Over the last 90 days City Office has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, City Office is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Site Centers and City Office

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

The idea behind Site Centers Corp and City Office 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.