Correlation Between Brookfield Infrastructure and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure 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 Brookfield Infrastructure and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Infrastructure Partners and Brookfield Office Properties, you can compare the effects of market volatilities on Brookfield Infrastructure 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 Brookfield Infrastructure with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Brookfield Office.
Diversification Opportunities for Brookfield Infrastructure and Brookfield Office
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Brookfield is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Brookfield Infrastructure 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 Brookfield Infrastructure Partners 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 Brookfield Infrastructure i.e., Brookfield Infrastructure and Brookfield Office go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Brookfield Office
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to under-perform the Brookfield Office. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brookfield Infrastructure Partners is 2.03 times less risky than Brookfield Office. The preferred stock trades about -0.12 of its potential returns per unit of risk. The Brookfield Office Properties is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Brookfield Office Properties on September 23, 2024 and sell it today you would earn a total of 88.00 from holding Brookfield Office Properties or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Brookfield Office Properties
Performance |
| Timeline |
| Brookfield Infrastructure |
| Brookfield Office |
Brookfield Infrastructure and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Brookfield Office
The main advantage of trading using opposite Brookfield Infrastructure and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure 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.| Brookfield Infrastructure vs. Chatham Rock Phosphate | Brookfield Infrastructure vs. Elixxer | Brookfield Infrastructure vs. Cielo Waste Solutions | Brookfield Infrastructure vs. Blockmate Ventures |
| Brookfield Office vs. Brookfield Infrastructure Partners | Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Infrastructure Partners |
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 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.
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