Correlation Between CITY OFFICE and Fair Isaac

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

Diversification Opportunities for CITY OFFICE and Fair Isaac

0.13

Correlation Coefficient

CITY OFFICE  Fair Isaac

Average diversification

The 3 months correlation between CITY and Fair is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of CITY OFFICE i.e., CITY OFFICE and Fair Isaac go up and down completely randomly.

Pair Corralation between CITY OFFICE and Fair Isaac

Assuming the 90 days horizon CITY OFFICE is expected to generate 131.14 times less return on investment than Fair Isaac. But when comparing it to its historical volatility, CITY OFFICE REIT is 6.19 times less risky than Fair Isaac. It trades about 0.0 of its potential returns per unit of risk. Fair Isaac Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  55,500  in Fair Isaac Corp on September 23, 2024 and sell it today you would earn a total of  145,200  from holding Fair Isaac Corp or generate 261.62% return on investment over 90 days.

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

CITY OFFICE REIT  vs.  Fair Isaac Corp

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.

Fair Isaac Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fair Isaac unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITY OFFICE and Fair Isaac

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

The idea behind CITY OFFICE REIT and Fair Isaac Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.