Correlation Between Brookfield Property and New Concept
Can any of the company-specific risk be diversified away by investing in both Brookfield Property and New Concept 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 New Concept 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 New Concept Energy, you can compare the effects of market volatilities on Brookfield Property and New Concept 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 New Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Property and New Concept.
Diversification Opportunities for Brookfield Property and New Concept
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and New is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Property Partners and New Concept Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Concept Energy 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 New Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Concept Energy has no effect on the direction of Brookfield Property i.e., Brookfield Property and New Concept go up and down completely randomly.
Pair Corralation between Brookfield Property and New Concept
Assuming the 90 days horizon Brookfield Property Partners is expected to under-perform the New Concept. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brookfield Property Partners is 1.76 times less risky than New Concept. The preferred stock trades about -0.2 of its potential returns per unit of risk. The New Concept Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 115.00 in New Concept Energy on October 15, 2024 and sell it today you would earn a total of 4.00 from holding New Concept Energy or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Property Partners vs. New Concept Energy
Performance |
| Timeline |
| Brookfield Property |
| New Concept Energy |
Brookfield Property and New Concept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Property and New Concept
The main advantage of trading using opposite Brookfield Property and New Concept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Property position performs unexpectedly, New Concept 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 New Concept will offset losses from the drop in New Concept'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 |
| New Concept vs. Marcus Millichap | New Concept vs. J W Mays | New Concept vs. Frp Holdings Ord | New Concept vs. Maui Land Pineapple |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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