Correlation Between Brookfield Office and KDA
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and KDA 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 KDA 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 KDA Group, you can compare the effects of market volatilities on Brookfield Office and KDA 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 KDA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and KDA.
Diversification Opportunities for Brookfield Office and KDA
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and KDA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and KDA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDA Group 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 KDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDA Group has no effect on the direction of Brookfield Office i.e., Brookfield Office and KDA go up and down completely randomly.
Pair Corralation between Brookfield Office and KDA
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.18 times more return on investment than KDA. However, Brookfield Office Properties is 5.69 times less risky than KDA. It trades about 0.14 of its potential returns per unit of risk. KDA Group is currently generating about -0.01 per unit of risk. If you would invest 1,454 in Brookfield Office Properties on September 3, 2024 and sell it today you would earn a total of 276.00 from holding Brookfield Office Properties or generate 18.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. KDA Group
Performance |
| Timeline |
| Brookfield Office |
| KDA Group |
Brookfield Office and KDA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and KDA
The main advantage of trading using opposite Brookfield Office and KDA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, KDA 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 KDA will offset losses from the drop in KDA'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 |
| KDA vs. Air Canada | KDA vs. Algoma Steel Group | KDA vs. Maple Leaf Foods | KDA vs. Brookfield Office Properties |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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