Correlation Between Brookfield Office and Salesforce
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Salesforce 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 Salesforce 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 SalesforceCom CDR, you can compare the effects of market volatilities on Brookfield Office and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Salesforce.
Diversification Opportunities for Brookfield Office and Salesforce
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and Salesforce is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalesforceCom CDR has no effect on the direction of Brookfield Office i.e., Brookfield Office and Salesforce go up and down completely randomly.
Pair Corralation between Brookfield Office and Salesforce
Assuming the 90 days trading horizon Brookfield Office is expected to generate 7.42 times less return on investment than Salesforce. But when comparing it to its historical volatility, Brookfield Office Properties is 1.24 times less risky than Salesforce. It trades about 0.02 of its potential returns per unit of risk. SalesforceCom CDR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,109 in SalesforceCom CDR on September 4, 2024 and sell it today you would earn a total of 1,534 from holding SalesforceCom CDR or generate 138.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. SalesforceCom CDR
Performance |
| Timeline |
| Brookfield Office |
| SalesforceCom CDR |
Brookfield Office and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Salesforce
The main advantage of trading using opposite Brookfield Office and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| Brookfield Office vs. Apple Inc CDR | Brookfield Office vs. Microsoft Corp CDR | Brookfield Office vs. Amazon CDR | Brookfield Office vs. Alphabet Inc CDR |
| Salesforce vs. Highwood Asset Management | Salesforce vs. Partners Value Investments | Salesforce vs. Gamehost | Salesforce vs. Bip Investment Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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