Correlation Between CBL Associates and Orion Office

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

By analyzing existing cross correlation between CBL Associates Properties and Orion Office Reit, you can compare the effects of market volatilities on CBL Associates and Orion 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 CBL Associates with a short position of Orion Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL Associates and Orion Office.

Diversification Opportunities for CBL Associates and Orion Office

0.77

Correlation Coefficient

CBL Associates  Orion Office

Poor diversification

The 3 months correlation between CBL and Orion is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CBL Associates Properties and Orion Office Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Office Reit and CBL Associates 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 CBL Associates Properties are associated (or correlated) with Orion Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Office Reit has no effect on the direction of CBL Associates i.e., CBL Associates and Orion Office go up and down completely randomly.

Pair Corralation between CBL Associates and Orion Office

Considering the 90-day investment horizon CBL Associates Properties is expected to under-perform the Orion Office. But the stock apears to be less risky and, when comparing its historical volatility, CBL Associates Properties is 2.28 times less risky than Orion Office. The stock trades about -0.1 of its potential returns per unit of risk. The Orion Office Reit is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Orion Office Reit on February 2, 2024 and sell it today you would lose (1.00) from holding Orion Office Reit or give up 0.31% of portfolio value over 90 days.

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

CBL Associates Properties  vs.  Orion Office Reit

CBL Associates Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBL Associates Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Orion Office Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orion Office Reit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CBL Associates and Orion Office

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

The idea behind CBL Associates Properties and Orion Office Reit 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.