Correlation Between Brookfield Office and Altus Group
Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Altus Group 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 Altus Group 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 Altus Group Limited, you can compare the effects of market volatilities on Brookfield Office and Altus Group 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 Altus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Altus Group.
Diversification Opportunities for Brookfield Office and Altus Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Altus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Altus Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Group Limited 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 Altus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Group Limited has no effect on the direction of Brookfield Office i.e., Brookfield Office and Altus Group go up and down completely randomly.
Pair Corralation between Brookfield Office and Altus Group
Assuming the 90 days trading horizon Brookfield Office Properties is expected to generate 1.41 times more return on investment than Altus Group. However, Brookfield Office is 1.41 times more volatile than Altus Group Limited. It trades about 0.04 of its potential returns per unit of risk. Altus Group Limited is currently generating about 0.03 per unit of risk. If you would invest 885.00 in Brookfield Office Properties on October 12, 2024 and sell it today you would earn a total of 111.00 from holding Brookfield Office Properties or generate 12.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.31% |
| Values | Daily Returns |
Brookfield Office Properties vs. Altus Group Limited
Performance |
| Timeline |
| Brookfield Office |
| Altus Group Limited |
Brookfield Office and Altus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Office and Altus Group
The main advantage of trading using opposite Brookfield Office and Altus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Altus Group 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 Altus Group will offset losses from the drop in Altus Group's long position.| Brookfield Office vs. BMO Aggregate Bond | Brookfield Office vs. iShares Canadian HYBrid | Brookfield Office vs. Brompton European Dividend | Brookfield Office vs. Solar Alliance Energy |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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