Correlation Between Brookfield Office and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and NeXGold Mining 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 NeXGold Mining 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 NeXGold Mining Corp, you can compare the effects of market volatilities on Brookfield Office and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and NeXGold Mining.
Diversification Opportunities for Brookfield Office and NeXGold Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and NeXGold is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Brookfield Office i.e., Brookfield Office and NeXGold Mining go up and down completely randomly.
Pair Corralation between Brookfield Office and NeXGold Mining
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.32 times more return on investment than NeXGold Mining. However, Brookfield Office Properties is 3.17 times less risky than NeXGold Mining. It trades about 0.13 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about 0.02 per unit of risk. If you would invest 1,093 in Brookfield Office Properties on September 2, 2024 and sell it today you would earn a total of 637.00 from holding Brookfield Office Properties or generate 58.28% 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. NeXGold Mining Corp
Performance |
| Timeline |
| Brookfield Office |
| NeXGold Mining Corp |
Brookfield Office and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and NeXGold Mining
The main advantage of trading using opposite Brookfield Office and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Brookfield Office vs. Fairfax Financial Holdings | Brookfield Office vs. iShares Canadian HYBrid | Brookfield Office vs. Brompton European Dividend | Brookfield Office vs. Solar Alliance Energy |
| NeXGold Mining vs. Royal Bank of | NeXGold Mining vs. Canso Credit Trust | NeXGold Mining vs. CI Financial Corp | NeXGold Mining vs. Olympia Financial Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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