Correlation Between COPT Defense and Outfront Media

Can any of the company-specific risk be diversified away by investing in both COPT Defense and Outfront Media 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 COPT Defense and Outfront Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COPT Defense Properties and Outfront Media, you can compare the effects of market volatilities on COPT Defense and Outfront Media 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 COPT Defense with a short position of Outfront Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of COPT Defense and Outfront Media.

Diversification Opportunities for COPT Defense and Outfront Media

0.69

Correlation Coefficient

COPT Defense  Outfront Media

Poor diversification

The 3 months correlation between COPT and Outfront is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding COPT Defense Properties and Outfront Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outfront Media and COPT Defense 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 COPT Defense Properties are associated (or correlated) with Outfront Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outfront Media has no effect on the direction of COPT Defense i.e., COPT Defense and Outfront Media go up and down completely randomly.

Pair Corralation between COPT Defense and Outfront Media

Considering the 90-day investment horizon COPT Defense is expected to generate 2.34 times less return on investment than Outfront Media. But when comparing it to its historical volatility, COPT Defense Properties is 1.87 times less risky than Outfront Media. It trades about 0.1 of its potential returns per unit of risk. Outfront Media is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,512  in Outfront Media on May 1, 2025 and sell it today you would earn a total of  236.00  from holding Outfront Media or generate 15.61% return on investment over 90 days.

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

COPT Defense Properties  vs.  Outfront Media

COPT Defense Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COPT Defense Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, COPT Defense may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Outfront Media

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Outfront Media are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Outfront Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COPT Defense and Outfront Media

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

The idea behind COPT Defense Properties and Outfront Media 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 Commodity Directory module to find actively traded commodities issued by global exchanges.