Correlation Between Ascot Resources and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Ascot Resources 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 Ascot Resources and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascot Resources and Brookfield Office Properties, you can compare the effects of market volatilities on Ascot Resources 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 Ascot Resources with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascot Resources and Brookfield Office.
Diversification Opportunities for Ascot Resources and Brookfield Office
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ascot and Brookfield is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ascot Resources and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Ascot Resources 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 Ascot Resources 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 Ascot Resources i.e., Ascot Resources and Brookfield Office go up and down completely randomly.
Pair Corralation between Ascot Resources and Brookfield Office
Assuming the 90 days trading horizon Ascot Resources is expected to generate 5.16 times more return on investment than Brookfield Office. However, Ascot Resources is 5.16 times more volatile than Brookfield Office Properties. It trades about 0.15 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.19 per unit of risk. If you would invest 18.00 in Ascot Resources on October 17, 2024 and sell it today you would earn a total of 2.00 from holding Ascot Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascot Resources vs. Brookfield Office Properties
Performance |
| Timeline |
| Ascot Resources |
| Brookfield Office |
Ascot Resources and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascot Resources and Brookfield Office
The main advantage of trading using opposite Ascot Resources and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascot Resources 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.| Ascot Resources vs. Bausch Health Companies | Ascot Resources vs. T2 Metals Corp | Ascot Resources vs. TUT Fitness Group | Ascot Resources vs. Rogers Communications |
| Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Off Prop |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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