Correlation Between Brookfield Office and Birchtech Corp
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Birchtech Corp 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 Birchtech Corp 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 Birchtech Corp, you can compare the effects of market volatilities on Brookfield Office and Birchtech Corp 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 Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Birchtech Corp.
Diversification Opportunities for Brookfield Office and Birchtech Corp
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Birchtech is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech Corp 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 Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of Brookfield Office i.e., Brookfield Office and Birchtech Corp go up and down completely randomly.
Pair Corralation between Brookfield Office and Birchtech Corp
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.4 times more return on investment than Birchtech Corp. However, Brookfield Office Properties is 2.5 times less risky than Birchtech Corp. It trades about -0.02 of its potential returns per unit of risk. Birchtech Corp is currently generating about -0.02 per unit of risk. If you would invest 1,769 in Brookfield Office Properties on October 12, 2024 and sell it today you would lose (19.00) from holding Brookfield Office Properties or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. Birchtech Corp
Performance |
| Timeline |
| Brookfield Office |
| Birchtech Corp |
Brookfield Office and Birchtech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Birchtech Corp
The main advantage of trading using opposite Brookfield Office and Birchtech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Birchtech Corp 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 Birchtech Corp will offset losses from the drop in Birchtech Corp's long position.| Brookfield Office vs. SalesforceCom CDR | Brookfield Office vs. NorthWest Healthcare Properties | Brookfield Office vs. DIRTT Environmental Solutions | Brookfield Office vs. Labrador Iron Ore |
| Birchtech Corp vs. CNJ Capital Investments | Birchtech Corp vs. Brookfield Office Properties | Birchtech Corp vs. Quorum Information Technologies | Birchtech Corp vs. Western Investment |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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