Correlation Between Algonquin Power and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Algonquin Power 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 Algonquin Power and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algonquin Power Utilities and Brookfield Office Properties, you can compare the effects of market volatilities on Algonquin Power 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 Algonquin Power with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algonquin Power and Brookfield Office.
Diversification Opportunities for Algonquin Power and Brookfield Office
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Algonquin and Brookfield is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Algonquin Power Utilities and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Algonquin Power 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 Algonquin Power Utilities 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 Algonquin Power i.e., Algonquin Power and Brookfield Office go up and down completely randomly.
Pair Corralation between Algonquin Power and Brookfield Office
Assuming the 90 days trading horizon Algonquin Power Utilities is expected to under-perform the Brookfield Office. But the preferred stock apears to be less risky and, when comparing its historical volatility, Algonquin Power Utilities is 1.05 times less risky than Brookfield Office. The preferred stock trades about -0.04 of its potential returns per unit of risk. The Brookfield Office Properties is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,659 in Brookfield Office Properties on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Brookfield Office Properties or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Algonquin Power Utilities vs. Brookfield Office Properties
Performance |
| Timeline |
| Algonquin Power Utilities |
| Brookfield Office |
Algonquin Power and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algonquin Power and Brookfield Office
The main advantage of trading using opposite Algonquin Power and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algonquin Power 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.| Algonquin Power vs. Forstrong Global Income | Algonquin Power vs. Terreno Resources Corp | Algonquin Power vs. iShares Canadian HYBrid | Algonquin Power vs. Brompton European Dividend |
| Brookfield Office vs. Walmart Inc CDR | Brookfield Office vs. Amazon CDR | Brookfield Office vs. Berkshire Hathaway CDR | Brookfield Office vs. UnitedHealth Group CDR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |