Correlation Between Brookfield Office and NIKE
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and NIKE 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 NIKE 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 NIKE Inc CDR, you can compare the effects of market volatilities on Brookfield Office and NIKE 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 NIKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and NIKE.
Diversification Opportunities for Brookfield Office and NIKE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and NIKE is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and NIKE Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKE Inc 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 NIKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKE Inc CDR has no effect on the direction of Brookfield Office i.e., Brookfield Office and NIKE go up and down completely randomly.
Pair Corralation between Brookfield Office and NIKE
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 0.43 times more return on investment than NIKE. However, Brookfield Office Properties is 2.32 times less risky than NIKE. It trades about 0.08 of its potential returns per unit of risk. NIKE Inc CDR is currently generating about 0.02 per unit of risk. If you would invest 1,659 in Brookfield Office Properties on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Brookfield Office Properties or generate 1.21% 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. NIKE Inc CDR
Performance |
| Timeline |
| Brookfield Office |
| NIKE Inc CDR |
Brookfield Office and NIKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and NIKE
The main advantage of trading using opposite Brookfield Office and NIKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, NIKE 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 NIKE will offset losses from the drop in NIKE's long position.| Brookfield Office vs. HOME DEPOT CDR | Brookfield Office vs. UnitedHealth Group CDR | Brookfield Office vs. CVW CleanTech | Brookfield Office vs. Leons Furniture Limited |
| NIKE vs. Brookfield Office Properties | NIKE vs. Data Communications Management | NIKE vs. Advent Wireless | NIKE vs. Cogeco Communications |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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