Correlation Between Brookfield Office and Lycos Energy
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Lycos Energy 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 Lycos Energy 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 Lycos Energy, you can compare the effects of market volatilities on Brookfield Office and Lycos Energy 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 Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Lycos Energy.
Diversification Opportunities for Brookfield Office and Lycos Energy
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Lycos is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy 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 Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Brookfield Office i.e., Brookfield Office and Lycos Energy go up and down completely randomly.
Pair Corralation between Brookfield Office and Lycos Energy
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.24 times more return on investment than Lycos Energy. However, Brookfield Office Properties is 4.11 times less risky than Lycos Energy. It trades about 0.31 of its potential returns per unit of risk. Lycos Energy is currently generating about 0.06 per unit of risk. If you would invest 1,653 in Brookfield Office Properties on September 5, 2024 and sell it today you would earn a total of 89.00 from holding Brookfield Office Properties or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. Lycos Energy
Performance |
| Timeline |
| Brookfield Office |
| Lycos Energy |
Brookfield Office and Lycos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Lycos Energy
The main advantage of trading using opposite Brookfield Office and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Lycos Energy 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 Lycos Energy will offset losses from the drop in Lycos Energy'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 |
| Lycos Energy vs. Profound Medical Corp | Lycos Energy vs. Brookfield Office Properties | Lycos Energy vs. Marimaca Copper Corp | Lycos Energy vs. QC Copper and |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |