Correlation Between City Developments and Safehold

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both City Developments and Safehold 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 Developments and Safehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Developments Limited and Safehold, you can compare the effects of market volatilities on City Developments and Safehold 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 Developments with a short position of Safehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Developments and Safehold.

Diversification Opportunities for City Developments and Safehold

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between City and Safehold is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding City Developments Limited and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold and City Developments 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 Developments Limited are associated (or correlated) with Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of City Developments i.e., City Developments and Safehold go up and down completely randomly.

Pair Corralation between City Developments and Safehold

Assuming the 90 days horizon City Developments Limited is expected to generate 0.49 times more return on investment than Safehold. However, City Developments Limited is 2.04 times less risky than Safehold. It trades about -0.03 of its potential returns per unit of risk. Safehold is currently generating about -0.04 per unit of risk. If you would invest  541.00  in City Developments Limited on December 29, 2023 and sell it today you would lose (103.00) from holding City Developments Limited or give up 19.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy88.55%
ValuesDaily Returns

City Developments Limited  vs.  Safehold

 Performance 
       Timeline  
City Developments 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days City Developments Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Safehold 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Safehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

City Developments and Safehold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with City Developments and Safehold

The main advantage of trading using opposite City Developments and Safehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Developments position performs unexpectedly, Safehold 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 Safehold will offset losses from the drop in Safehold's long position.
The idea behind City Developments Limited and Safehold 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk