Correlation Between NorthWest Healthcare and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both NorthWest Healthcare 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 NorthWest Healthcare and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorthWest Healthcare Properties and Brookfield Office Properties, you can compare the effects of market volatilities on NorthWest Healthcare 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 NorthWest Healthcare with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthWest Healthcare and Brookfield Office.
Diversification Opportunities for NorthWest Healthcare and Brookfield Office
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NorthWest and Brookfield is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NorthWest Healthcare Propertie and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and NorthWest Healthcare 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 NorthWest Healthcare Properties 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 NorthWest Healthcare i.e., NorthWest Healthcare and Brookfield Office go up and down completely randomly.
Pair Corralation between NorthWest Healthcare and Brookfield Office
Assuming the 90 days trading horizon NorthWest Healthcare Properties is expected to under-perform the Brookfield Office. In addition to that, NorthWest Healthcare is 1.1 times more volatile than Brookfield Office Properties. It trades about -0.05 of its total potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.03 per unit of volatility. If you would invest 1,350 in Brookfield Office Properties on October 12, 2024 and sell it today you would earn a total of 331.00 from holding Brookfield Office Properties or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NorthWest Healthcare Propertie vs. Brookfield Office Properties
Performance |
| Timeline |
| NorthWest Healthcare |
| Brookfield Office |
NorthWest Healthcare and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorthWest Healthcare and Brookfield Office
The main advantage of trading using opposite NorthWest Healthcare and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthWest Healthcare 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.| NorthWest Healthcare vs. SmartCentres Real Estate | NorthWest Healthcare vs. Dream Industrial Real | NorthWest Healthcare vs. RioCan Real Estate | NorthWest Healthcare vs. Algonquin Power Utilities |
| Brookfield Office vs. NorthWest Healthcare Properties | Brookfield Office vs. Verizon Communications CDR | Brookfield Office vs. Jamieson Wellness | Brookfield Office vs. SalesforceCom 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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