Correlation Between NeXGold Mining and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both NeXGold 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 NeXGold 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 NeXGold Mining Corp and Brookfield Office Properties, you can compare the effects of market volatilities on NeXGold 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 NeXGold Mining with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeXGold Mining and Brookfield Office.
Diversification Opportunities for NeXGold Mining and Brookfield Office
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NeXGold and Brookfield is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NeXGold Mining Corp and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and NeXGold 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 NeXGold Mining Corp 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 NeXGold Mining i.e., NeXGold Mining and Brookfield Office go up and down completely randomly.
Pair Corralation between NeXGold Mining and Brookfield Office
Assuming the 90 days trading horizon NeXGold Mining Corp is expected to under-perform the Brookfield Office. In addition to that, NeXGold Mining is 2.03 times more volatile than Brookfield Office Properties. It trades about -0.19 of its total potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.16 per unit of volatility. If you would invest 1,739 in Brookfield Office Properties on November 5, 2024 and sell it today you would earn a total of 60.00 from holding Brookfield Office Properties or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeXGold Mining Corp vs. Brookfield Office Properties
Performance |
| Timeline |
| NeXGold Mining Corp |
| Brookfield Office |
NeXGold Mining and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeXGold Mining and Brookfield Office
The main advantage of trading using opposite NeXGold Mining and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeXGold 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.| NeXGold Mining vs. Newmont Goldcorp Corp | NeXGold Mining vs. Agnico Eagle Mines | NeXGold Mining vs. Barrick Gold Corp | NeXGold Mining vs. Wheaton Precious Metals |
| Brookfield Office vs. Economic Investment Trust | Brookfield Office vs. Maple Peak Investments | Brookfield Office vs. Canadian General Investments | Brookfield Office vs. Andean Precious Metals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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