Correlation Between Broadstone Net and City Office

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

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

Diversification Opportunities for Broadstone Net and City Office

0.44

Correlation Coefficient

Broadstone Net  City Office

Very weak diversification

The 3 months correlation between Broadstone and City is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and City Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office and Broadstone Net 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 Broadstone Net Lease 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 Broadstone Net i.e., Broadstone Net and City Office go up and down completely randomly.

Pair Corralation between Broadstone Net and City Office

Considering the 90-day investment horizon Broadstone Net is expected to generate 10.71 times less return on investment than City Office. But when comparing it to its historical volatility, Broadstone Net Lease is 3.08 times less risky than City Office. It trades about 0.06 of its potential returns per unit of risk. City Office is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  477.00  in City Office on May 6, 2025 and sell it today you would earn a total of  218.00  from holding City Office or generate 45.7% return on investment over 90 days.

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

Broadstone Net Lease  vs.  City Office

Broadstone Net Lease

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Broadstone Net Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

City Office

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in City Office are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, City Office displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broadstone Net and City Office

The main advantage of trading using opposite Broadstone Net and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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 Broadstone Net Lease 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..