Correlation Between Brookfield Office and TC Energy
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and TC 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 TC 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 TC Energy Corp, you can compare the effects of market volatilities on Brookfield Office and TC 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and TC Energy.
Diversification Opportunities for Brookfield Office and TC Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and TRP-PF is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of Brookfield Office i.e., Brookfield Office and TC Energy go up and down completely randomly.
Pair Corralation between Brookfield Office and TC Energy
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 2.28 times more return on investment than TC Energy. However, Brookfield Office is 2.28 times more volatile than TC Energy Corp. It trades about 0.23 of its potential returns per unit of risk. TC Energy Corp is currently generating about 0.33 per unit of risk. If you would invest 1,665 in Brookfield Office Properties on October 29, 2024 and sell it today you would earn a total of 91.00 from holding Brookfield Office Properties or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Office Properties vs. TC Energy Corp
Performance |
| Timeline |
| Brookfield Office |
| TC Energy Corp |
Brookfield Office and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and TC Energy
The main advantage of trading using opposite Brookfield Office and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, TC 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 TC Energy will offset losses from the drop in TC Energy's long position.| Brookfield Office vs. Prime Dividend Corp | Brookfield Office vs. Canadian Life Companies | Brookfield Office vs. Financial 15 Split | Brookfield Office vs. Dividend 15 Split |
| TC Energy vs. North American Construction | TC Energy vs. Brookfield Office Properties | TC Energy vs. Monument Mining Limited | TC Energy vs. Bird Construction |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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