Correlation Between Brookfield Office and Blockmate Ventures

Can any of the company-specific risk be diversified away by investing in both Brookfield Office and Blockmate Ventures 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 Brookfield Office and Blockmate Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brookfield Office Properties and Blockmate Ventures, you can compare the effects of market volatilities on Brookfield Office and Blockmate Ventures 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 Brookfield Office with a short position of Blockmate Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Office and Blockmate Ventures.

Diversification Opportunities for Brookfield Office and Blockmate Ventures

0.45

Correlation Coefficient

Brookfield Office  Blockmate Ventures

Very weak diversification

The 3 months correlation between Brookfield and Blockmate is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Office Properties and Blockmate Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockmate Ventures and Brookfield Office 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 Brookfield Office Properties are associated (or correlated) with Blockmate Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockmate Ventures has no effect on the direction of Brookfield Office i.e., Brookfield Office and Blockmate Ventures go up and down completely randomly.

Pair Corralation between Brookfield Office and Blockmate Ventures

Assuming the 90 days trading horizon Brookfield Office is expected to generate 114.78 times less return on investment than Blockmate Ventures. But when comparing it to its historical volatility, Brookfield Office Properties is 14.73 times less risky than Blockmate Ventures. It trades about 0.04 of its potential returns per unit of risk. Blockmate Ventures is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Blockmate Ventures on October 11, 2024 and sell it today you would earn a total of  22.00  from holding Blockmate Ventures or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Brookfield Office Properties  vs.  Blockmate Ventures

Brookfield Office

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Office Properties are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Brookfield Office may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Blockmate Ventures

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockmate Ventures are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Blockmate Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Office and Blockmate Ventures

The main advantage of trading using opposite Brookfield Office and Blockmate Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Office position performs unexpectedly, Blockmate Ventures 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 Blockmate Ventures will offset losses from the drop in Blockmate Ventures' long position.

The idea behind Brookfield Office Properties and Blockmate Ventures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.