Correlation Between Brookfield Property and DigitalBridge
Can any of the company-specific risk be diversified away by investing in both Brookfield Property and DigitalBridge 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 Property and DigitalBridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Property Partners and DigitalBridge Group, you can compare the effects of market volatilities on Brookfield Property and DigitalBridge 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 Property with a short position of DigitalBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Property and DigitalBridge.
Diversification Opportunities for Brookfield Property and DigitalBridge
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and DigitalBridge is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Property Partners and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and Brookfield Property 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 Property Partners are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Brookfield Property i.e., Brookfield Property and DigitalBridge go up and down completely randomly.
Pair Corralation between Brookfield Property and DigitalBridge
Assuming the 90 days horizon Brookfield Property Partners is expected to under-perform the DigitalBridge. In addition to that, Brookfield Property is 3.08 times more volatile than DigitalBridge Group. It trades about -0.2 of its total potential returns per unit of risk. DigitalBridge Group is currently generating about 0.04 per unit of volatility. If you would invest 2,450 in DigitalBridge Group on October 15, 2024 and sell it today you would earn a total of 8.00 from holding DigitalBridge Group or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Property Partners vs. DigitalBridge Group
Performance |
| Timeline |
| Brookfield Property |
| DigitalBridge Group |
Brookfield Property and DigitalBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Property and DigitalBridge
The main advantage of trading using opposite Brookfield Property and DigitalBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Property position performs unexpectedly, DigitalBridge 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 DigitalBridge will offset losses from the drop in DigitalBridge's long position.| Brookfield Property vs. Coupang LLC | Brookfield Property vs. Vita Coco | Brookfield Property vs. Oatly Group AB | Brookfield Property vs. Molson Coors Brewing |
| DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. DigitalBridge Group | DigitalBridge vs. Global Net Lease | DigitalBridge vs. Chimera Investment |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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