Correlation Between Brookfield Office and Bird Construction
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Bird Construction 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 Bird Construction 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 Bird Construction, you can compare the effects of market volatilities on Brookfield Office and Bird Construction 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 Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Bird Construction.
Diversification Opportunities for Brookfield Office and Bird Construction
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brookfield and Bird is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction 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 Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Brookfield Office i.e., Brookfield Office and Bird Construction go up and down completely randomly.
Pair Corralation between Brookfield Office and Bird Construction
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.74 times more return on investment than Bird Construction. However, Brookfield Office Properties is 1.35 times less risky than Bird Construction. It trades about -0.11 of its potential returns per unit of risk. Bird Construction is currently generating about -0.22 per unit of risk. If you would invest 1,760 in Brookfield Office Properties on October 7, 2024 and sell it today you would lose (60.00) from holding Brookfield Office Properties or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. Bird Construction
Performance |
| Timeline |
| Brookfield Office |
| Bird Construction |
Brookfield Office and Bird Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Bird Construction
The main advantage of trading using opposite Brookfield Office and Bird Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Bird Construction 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 Bird Construction will offset losses from the drop in Bird Construction's long position.| Brookfield Office vs. Environmental Waste International | Brookfield Office vs. BluMetric Environmental | Brookfield Office vs. Enduro Metals Corp | Brookfield Office vs. Partners Value Investments |
| Bird Construction vs. Aecon Group | Bird Construction vs. Mullen Group | Bird Construction vs. Wajax | Bird Construction vs. Exchange Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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