Correlation Between Brookfield Property and MDJM
Can any of the company-specific risk be diversified away by investing in both Brookfield Property and MDJM 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 MDJM 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 MDJM, you can compare the effects of market volatilities on Brookfield Property and MDJM 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 MDJM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Property and MDJM.
Diversification Opportunities for Brookfield Property and MDJM
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and MDJM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Property Partners and MDJM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MDJM 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 MDJM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MDJM has no effect on the direction of Brookfield Property i.e., Brookfield Property and MDJM go up and down completely randomly.
Pair Corralation between Brookfield Property and MDJM
Assuming the 90 days horizon Brookfield Property Partners is expected to generate 0.09 times more return on investment than MDJM. However, Brookfield Property Partners is 11.43 times less risky than MDJM. It trades about -0.23 of its potential returns per unit of risk. MDJM is currently generating about -0.08 per unit of risk. If you would invest 1,460 in Brookfield Property Partners on September 26, 2024 and sell it today you would lose (173.00) from holding Brookfield Property Partners or give up 11.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Property Partners vs. MDJM
Performance |
| Timeline |
| Brookfield Property |
| MDJM |
Brookfield Property and MDJM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Property and MDJM
The main advantage of trading using opposite Brookfield Property and MDJM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Property position performs unexpectedly, MDJM 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 MDJM will offset losses from the drop in MDJM's long position.| Brookfield Property vs. Wetouch Technology Common | Brookfield Property vs. New Concept Energy | Brookfield Property vs. DigitalBridge Group | Brookfield Property vs. DigitalBridge Group |
| MDJM vs. Wetouch Technology Common | MDJM vs. New Concept Energy | MDJM vs. DigitalBridge Group | MDJM vs. DigitalBridge Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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