Correlation Between Bce and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Bce 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 Bce and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bce Inc Pref and Brookfield Office Properties, you can compare the effects of market volatilities on Bce 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 Bce with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bce and Brookfield Office.
Diversification Opportunities for Bce and Brookfield Office
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bce and Brookfield is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bce Inc Pref and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Bce 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 Bce Inc Pref 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 Bce i.e., Bce and Brookfield Office go up and down completely randomly.
Pair Corralation between Bce and Brookfield Office
Assuming the 90 days trading horizon Bce is expected to generate 8.03 times less return on investment than Brookfield Office. But when comparing it to its historical volatility, Bce Inc Pref is 2.14 times less risky than Brookfield Office. It trades about 0.17 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest 1,634 in Brookfield Office Properties on September 14, 2024 and sell it today you would earn a total of 191.00 from holding Brookfield Office Properties or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bce Inc Pref vs. Brookfield Office Properties
Performance |
| Timeline |
| Bce Inc Pref |
| Brookfield Office |
Bce and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bce and Brookfield Office
The main advantage of trading using opposite Bce and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bce 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.| Bce vs. Brookfield Office Properties | Bce vs. Royal Bank of | Bce vs. Gfl Environmental Holdings | Bce vs. North American Construction |
| Brookfield Office vs. BluMetric Environmental | Brookfield Office vs. Champion Iron | Brookfield Office vs. Labrador Iron Ore | Brookfield Office vs. Canlan Ice Sports |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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