Correlation Between National Bank and Brookfield Offi
Can any of the company-specific risk be diversified away by investing in both National Bank and Brookfield Offi 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 National Bank and Brookfield Offi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and Brookfield Offi Pro, you can compare the effects of market volatilities on National Bank and Brookfield Offi 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 National Bank with a short position of Brookfield Offi. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Brookfield Offi.
Diversification Opportunities for National Bank and Brookfield Offi
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Brookfield is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Brookfield Offi Pro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Offi Pro and National Bank 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 National Bank of are associated (or correlated) with Brookfield Offi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Offi Pro has no effect on the direction of National Bank i.e., National Bank and Brookfield Offi go up and down completely randomly.
Pair Corralation between National Bank and Brookfield Offi
Assuming the 90 days trading horizon National Bank is expected to generate 13.63 times less return on investment than Brookfield Offi. But when comparing it to its historical volatility, National Bank of is 19.48 times less risky than Brookfield Offi. It trades about 0.21 of its potential returns per unit of risk. Brookfield Offi Pro is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,425 in Brookfield Offi Pro on November 6, 2024 and sell it today you would earn a total of 46.00 from holding Brookfield Offi Pro or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. Brookfield Offi Pro
Performance |
| Timeline |
| National Bank |
| Brookfield Offi Pro |
National Bank and Brookfield Offi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Brookfield Offi
The main advantage of trading using opposite National Bank and Brookfield Offi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Brookfield Offi 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 Offi will offset losses from the drop in Brookfield Offi's long position.| National Bank vs. Black Mammoth Metals | National Bank vs. Primaris Retail RE | National Bank vs. Canlan Ice Sports | National Bank vs. Profound Medical Corp |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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