Correlation Between City Office and AG Mortgage
Can any of the company-specific risk be diversified away by investing in both City Office and AG Mortgage 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 AG Mortgage 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 AG Mortgage Investment, you can compare the effects of market volatilities on City Office and AG Mortgage 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 AG Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Office and AG Mortgage.
Diversification Opportunities for City Office and AG Mortgage
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and MITN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding City Office REIT and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment 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 AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of City Office i.e., City Office and AG Mortgage go up and down completely randomly.
Pair Corralation between City Office and AG Mortgage
Assuming the 90 days trading horizon City Office REIT is expected to generate 12.22 times more return on investment than AG Mortgage. However, City Office is 12.22 times more volatile than AG Mortgage Investment. It trades about 0.12 of its potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.09 per unit of risk. If you would invest 1,970 in City Office REIT on July 9, 2025 and sell it today you would earn a total of 551.00 from holding City Office REIT or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
City Office REIT vs. AG Mortgage Investment
Performance |
| Timeline |
| City Office REIT |
| AG Mortgage Investment |
City Office and AG Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Office and AG Mortgage
The main advantage of trading using opposite City Office and AG Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Office position performs unexpectedly, AG Mortgage 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 AG Mortgage will offset losses from the drop in AG Mortgage's long position.| City Office vs. NVIDIA | City Office vs. Microsoft | City Office vs. Apple Inc | City Office vs. Alphabet Inc Class C |
| AG Mortgage vs. D MARKET Electronic Services | AG Mortgage vs. Klegg Electronics | AG Mortgage vs. Ryanair Holdings PLC | AG Mortgage vs. Sinclair Broadcast Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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