Correlation Between Dream Office and CT Real

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

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

Diversification Opportunities for Dream Office and CT Real

0.58

Correlation Coefficient

Dream Office  CT Real

Very weak diversification

The 3 months correlation between Dream and CTRRF is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Real Estate and Dream 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 Dream Office Real are associated (or correlated) with CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of Dream Office i.e., Dream Office and CT Real go up and down completely randomly.

Pair Corralation between Dream Office and CT Real

Assuming the 90 days horizon Dream Office Real is expected to generate 2.59 times more return on investment than CT Real. However, Dream Office is 2.59 times more volatile than CT Real Estate. It trades about 0.1 of its potential returns per unit of risk. CT Real Estate is currently generating about 0.13 per unit of risk. If you would invest  1,092  in Dream Office Real on May 6, 2025 and sell it today you would earn a total of  158.00  from holding Dream Office Real or generate 14.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.41%
Values	Daily Returns

Dream Office Real  vs.  CT Real Estate

Dream Office Real

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Office Real are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Dream Office reported solid returns over the last few months and may actually be approaching a breakup point.

CT Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CT Real Estate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CT Real may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Dream Office and CT Real

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

The idea behind Dream Office Real and CT Real Estate 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.