Correlation Between Brookfield Office and Financial
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Financial 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 Office and Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Office Properties and Financial 15 Split, you can compare the effects of market volatilities on Brookfield Office and Financial 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 Office with a short position of Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Financial.
Diversification Opportunities for Brookfield Office and Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Financial is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split and Brookfield Office 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 Office Properties are associated (or correlated) with Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Brookfield Office i.e., Brookfield Office and Financial go up and down completely randomly.
Pair Corralation between Brookfield Office and Financial
Assuming the 90 days trading horizon Brookfield Office is expected to generate 1.46 times less return on investment than Financial. In addition to that, Brookfield Office is 5.64 times more volatile than Financial 15 Split. It trades about 0.02 of its total potential returns per unit of risk. Financial 15 Split is currently generating about 0.18 per unit of volatility. If you would invest 824.00 in Financial 15 Split on October 12, 2024 and sell it today you would earn a total of 252.00 from holding Financial 15 Split or generate 30.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. Financial 15 Split
Performance |
| Timeline |
| Brookfield Office |
| Financial 15 Split |
Brookfield Office and Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Financial
The main advantage of trading using opposite Brookfield Office and Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Financial 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 Financial will offset losses from the drop in Financial's long position.| Brookfield Office vs. Financial 15 Split | Brookfield Office vs. Dividend 15 Split | Brookfield Office vs. Dividend Growth Split | Brookfield Office vs. Dividend 15 Split |
| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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