Correlation Between Newmark and Brookfield Property
Can any of the company-specific risk be diversified away by investing in both Newmark 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 Newmark and Brookfield Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and Brookfield Property Partners, you can compare the effects of market volatilities on Newmark 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 Newmark with a short position of Brookfield Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and Brookfield Property.
Diversification Opportunities for Newmark and Brookfield Property
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmark and Brookfield is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Brookfield Property Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Property and Newmark 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 Newmark Group 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 Newmark i.e., Newmark and Brookfield Property go up and down completely randomly.
Pair Corralation between Newmark and Brookfield Property
Given the investment horizon of 90 days Newmark Group is expected to generate 1.54 times more return on investment than Brookfield Property. However, Newmark is 1.54 times more volatile than Brookfield Property Partners. It trades about 0.1 of its potential returns per unit of risk. Brookfield Property Partners is currently generating about 0.07 per unit of risk. If you would invest 1,006 in Newmark Group on November 28, 2024 and sell it today you would earn a total of 405.00 from holding Newmark Group or generate 40.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. Brookfield Property Partners
Performance |
| Timeline |
| Newmark Group |
| Brookfield Property |
Newmark and Brookfield Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and Brookfield Property
The main advantage of trading using opposite Newmark and Brookfield Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark 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.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| Brookfield Property vs. Avarone Metals | Brookfield Property vs. U Haul Holding | Brookfield Property vs. Idaho Strategic Resources | Brookfield Property vs. ioneer Ltd American |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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