Correlation Between Brookfield Office and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Plaza Retail 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 Plaza Retail 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 Plaza Retail REIT, you can compare the effects of market volatilities on Brookfield Office and Plaza Retail 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 Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Plaza Retail.
Diversification Opportunities for Brookfield Office and Plaza Retail
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Plaza is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Brookfield Office i.e., Brookfield Office and Plaza Retail go up and down completely randomly.
Pair Corralation between Brookfield Office and Plaza Retail
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 1.63 times more return on investment than Plaza Retail. However, Brookfield Office is 1.63 times more volatile than Plaza Retail REIT. It trades about 0.01 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.03 per unit of risk. If you would invest 1,720 in Brookfield Office Properties on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Brookfield Office Properties or generate 0.58% 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. Plaza Retail REIT
Performance |
| Timeline |
| Brookfield Office |
| Plaza Retail REIT |
Brookfield Office and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Plaza Retail
The main advantage of trading using opposite Brookfield Office and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail'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 |
| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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