Correlation Between Falcon Energy and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Falcon Energy 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 Falcon Energy and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Brookfield Office Properties, you can compare the effects of market volatilities on Falcon Energy 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 Falcon Energy with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Brookfield Office.
Diversification Opportunities for Falcon Energy and Brookfield Office
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Falcon and Brookfield is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Falcon Energy 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 Falcon Energy Materials 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 Falcon Energy i.e., Falcon Energy and Brookfield Office go up and down completely randomly.
Pair Corralation between Falcon Energy and Brookfield Office
Assuming the 90 days trading horizon Falcon Energy is expected to generate 1.03 times less return on investment than Brookfield Office. In addition to that, Falcon Energy is 2.42 times more volatile than Brookfield Office Properties. It trades about 0.02 of its total potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.06 per unit of volatility. If you would invest 1,233 in Brookfield Office Properties on September 2, 2024 and sell it today you would earn a total of 497.00 from holding Brookfield Office Properties or generate 40.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Brookfield Office Properties
Performance |
| Timeline |
| Falcon Energy Materials |
| Brookfield Office |
Falcon Energy and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Brookfield Office
The main advantage of trading using opposite Falcon Energy and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy 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.| Falcon Energy vs. Brookfield Office Properties | Falcon Energy vs. TGS Esports | Falcon Energy vs. Costco Wholesale Corp | Falcon Energy vs. Canlan Ice Sports |
| Brookfield Office vs. Fairfax Financial Holdings | Brookfield Office vs. iShares Canadian HYBrid | Brookfield Office vs. Brompton European Dividend | Brookfield Office vs. Solar Alliance Energy |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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