Correlation Between Abaxx Technologies and Brookfield Office

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

Diversification Opportunities for Abaxx Technologies and Brookfield Office

-0.23
  Correlation Coefficient

Very good diversification

The 3 months correlation between Abaxx and Brookfield is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Abaxx Technologies and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Abaxx Technologies 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 Abaxx Technologies are associated (or correlated) with Brookfield Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Office has no effect on the direction of Abaxx Technologies i.e., Abaxx Technologies and Brookfield Office go up and down completely randomly.

Pair Corralation between Abaxx Technologies and Brookfield Office

Assuming the 90 days trading horizon Abaxx Technologies is expected to under-perform the Brookfield Office. In addition to that, Abaxx Technologies is 1.12 times more volatile than Brookfield Office Properties. It trades about -0.05 of its total potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.13 per unit of volatility. If you would invest  945.00  in Brookfield Office Properties on October 28, 2024 and sell it today you would earn a total of  101.00  from holding Brookfield Office Properties or generate 10.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Abaxx Technologies  vs.  Brookfield Office Properties

 Performance 
       Timeline  
Abaxx Technologies 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Abaxx Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Abaxx Technologies is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Brookfield Office 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Office Properties are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Brookfield Office may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Abaxx Technologies and Brookfield Office Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abaxx Technologies and Brookfield Office

The main advantage of trading using opposite Abaxx Technologies and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abaxx Technologies position performs unexpectedly, Brookfield 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 Brookfield Office will offset losses from the drop in Brookfield Office's long position.
The idea behind Abaxx Technologies and Brookfield Office Properties 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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