Correlation Between Globex Mining and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and Brookfield Office Properties, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and Brookfield Office.
Diversification Opportunities for Globex Mining and Brookfield Office
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globex and Brookfield is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and Brookfield Office go up and down completely randomly.
Pair Corralation between Globex Mining and Brookfield Office
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 1.58 times more return on investment than Brookfield Office. However, Globex Mining is 1.58 times more volatile than Brookfield Office Properties. It trades about 0.27 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.23 per unit of risk. If you would invest 117.00 in Globex Mining Enterprises on October 22, 2024 and sell it today you would earn a total of 13.00 from holding Globex Mining Enterprises or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. Brookfield Office Properties
Performance |
| Timeline |
| Globex Mining Enterprises |
| Brookfield Office |
Globex Mining and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and Brookfield Office
The main advantage of trading using opposite Globex Mining and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Chibougamau Independent Mines | Globex Mining vs. Entree Resources | Globex Mining vs. Solitario Exploration Royalty | Globex Mining vs. Forsys Metals Corp |
| Brookfield Office vs. Chemtrade Logistics Income | Brookfield Office vs. Lion One Metals | Brookfield Office vs. Enerev5 Metals | Brookfield Office vs. HOME DEPOT CDR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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