Correlation Between Converge Technology and Brookfield Office

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Can any of the company-specific risk be diversified away by investing in both Converge Technology 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 Converge Technology and Brookfield Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Technology Solutions and Brookfield Office Properties, you can compare the effects of market volatilities on Converge Technology 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 Converge Technology with a short position of Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Brookfield Office.

Diversification Opportunities for Converge Technology and Brookfield Office

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Converge and Brookfield is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Converge Technology 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 Converge Technology Solutions 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 Converge Technology i.e., Converge Technology and Brookfield Office go up and down completely randomly.

Pair Corralation between Converge Technology and Brookfield Office

Assuming the 90 days trading horizon Converge Technology Solutions is expected to generate 2.48 times more return on investment than Brookfield Office. However, Converge Technology is 2.48 times more volatile than Brookfield Office Properties. It trades about 0.05 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.12 per unit of risk. If you would invest  334.00  in Converge Technology Solutions on October 24, 2024 and sell it today you would earn a total of  25.00  from holding Converge Technology Solutions or generate 7.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Converge Technology Solutions  vs.  Brookfield Office Properties

 Performance 
       Timeline  
Converge Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Converge Technology Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Converge Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Brookfield Office 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Office Properties are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Brookfield Office may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Converge Technology and Brookfield Office Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Converge Technology and Brookfield Office

The main advantage of trading using opposite Converge Technology and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology 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.
The idea behind Converge Technology Solutions and Brookfield Office Properties 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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