Correlation Between Eastwood Bio and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio 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 Eastwood Bio and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastwood Bio Medical Canada and Brookfield Office Properties, you can compare the effects of market volatilities on Eastwood Bio 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 Eastwood Bio with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio and Brookfield Office.
Diversification Opportunities for Eastwood Bio and Brookfield Office
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eastwood and Brookfield is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Eastwood Bio 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 Eastwood Bio Medical Canada 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 Eastwood Bio i.e., Eastwood Bio and Brookfield Office go up and down completely randomly.
Pair Corralation between Eastwood Bio and Brookfield Office
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 14.95 times more return on investment than Brookfield Office. However, Eastwood Bio is 14.95 times more volatile than Brookfield Office Properties. It trades about 0.03 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.11 per unit of risk. If you would invest 96.00 in Eastwood Bio Medical Canada on October 15, 2024 and sell it today you would lose (26.00) from holding Eastwood Bio Medical Canada or give up 27.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. Brookfield Office Properties
Performance |
| Timeline |
| Eastwood Bio Medical |
| Brookfield Office |
Eastwood Bio and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio and Brookfield Office
The main advantage of trading using opposite Eastwood Bio and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio 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.| Eastwood Bio vs. Covalon Technologies | Eastwood Bio vs. Sirona Biochem Corp | Eastwood Bio vs. Medicure | Eastwood Bio vs. Arch Biopartners |
| Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Office Properties | Brookfield Office vs. Brookfield Off Prop | Brookfield Office vs. Brookfield Office Properties |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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