Correlation Between Colliers International and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Colliers International and Brookfield Office 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 Colliers International and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colliers International Group and Brookfield Office Properties, you can compare the effects of market volatilities on Colliers International and Brookfield Office 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 Colliers International with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colliers International and Brookfield Office.
Diversification Opportunities for Colliers International and Brookfield Office
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Colliers and Brookfield is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Colliers International Group and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Colliers International 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 Colliers International Group are associated (or correlated) with Brookfield Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Office has no effect on the direction of Colliers International i.e., Colliers International and Brookfield Office go up and down completely randomly.
Pair Corralation between Colliers International and Brookfield Office
Assuming the 90 days trading horizon Colliers International Group is expected to generate 0.77 times more return on investment than Brookfield Office. However, Colliers International Group is 1.3 times less risky than Brookfield Office. It trades about 0.1 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.04 per unit of risk. If you would invest 15,134 in Colliers International Group on October 12, 2024 and sell it today you would earn a total of 4,248 from holding Colliers International Group or generate 28.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.85% |
| Values | Daily Returns |
Colliers International Group vs. Brookfield Office Properties
Performance |
| Timeline |
| Colliers International |
| Brookfield Office |
Colliers International and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colliers International and Brookfield Office
The main advantage of trading using opposite Colliers International and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colliers International position performs unexpectedly, Brookfield Office 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 Brookfield Office will offset losses from the drop in Brookfield Office's long position.| Colliers International vs. FirstService Corp | Colliers International vs. Altus Group Limited | Colliers International vs. Ritchie Bros Auctioneers | Colliers International vs. Winpak |
| Brookfield Office vs. NextSource Materials | Brookfield Office vs. Atrium Mortgage Investment | Brookfield Office vs. Diversified Royalty Corp | Brookfield Office vs. Capstone Mining Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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