Correlation Between AG Mortgage and Brookfield Property
Can any of the company-specific risk be diversified away by investing in both AG Mortgage and Brookfield Property 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 AG Mortgage and Brookfield Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AG Mortgage Investment and Brookfield Property Partners, you can compare the effects of market volatilities on AG Mortgage and Brookfield Property 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 AG Mortgage with a short position of Brookfield Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of AG Mortgage and Brookfield Property.
Diversification Opportunities for AG Mortgage and Brookfield Property
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MITT-PA and Brookfield is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AG Mortgage Investment and Brookfield Property Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Property and AG Mortgage 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 AG Mortgage Investment are associated (or correlated) with Brookfield Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Property has no effect on the direction of AG Mortgage i.e., AG Mortgage and Brookfield Property go up and down completely randomly.
Pair Corralation between AG Mortgage and Brookfield Property
Assuming the 90 days trading horizon AG Mortgage is expected to generate 2.93 times less return on investment than Brookfield Property. But when comparing it to its historical volatility, AG Mortgage Investment is 2.72 times less risky than Brookfield Property. It trades about 0.11 of its potential returns per unit of risk. Brookfield Property Partners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,464 in Brookfield Property Partners on August 25, 2024 and sell it today you would earn a total of 208.00 from holding Brookfield Property Partners or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AG Mortgage Investment vs. Brookfield Property Partners
Performance |
| Timeline |
| AG Mortgage Investment |
| Brookfield Property |
AG Mortgage and Brookfield Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AG Mortgage and Brookfield Property
The main advantage of trading using opposite AG Mortgage and Brookfield Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AG Mortgage position performs unexpectedly, Brookfield Property 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 Property will offset losses from the drop in Brookfield Property's long position.| AG Mortgage vs. New York Mortgage | AG Mortgage vs. New York Mortgage | AG Mortgage vs. Two Harbors Investment | AG Mortgage vs. Two Harbors Investment |
| Brookfield Property vs. Frp Holdings Ord | Brookfield Property vs. Transcontinental Realty Investors | Brookfield Property vs. J W Mays | Brookfield Property vs. Anywhere Real Estate |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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