Correlation Between Elbit Imaging and Brookfield Property

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

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

Diversification Opportunities for Elbit Imaging and Brookfield Property

-0.34

Correlation Coefficient

Elbit Imaging  Brookfield Property

Very good diversification

The 3 months correlation between Elbit and Brookfield is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Elbit Imaging and Brookfield Property Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Property and Elbit Imaging 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 Elbit Imaging 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 Elbit Imaging i.e., Elbit Imaging and Brookfield Property go up and down completely randomly.

Pair Corralation between Elbit Imaging and Brookfield Property

If you would invest  1,271  in Brookfield Property Partners on September 2, 2024 and sell it today you would earn a total of  186.00  from holding Brookfield Property Partners or generate 14.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Elbit Imaging  vs.  Brookfield Property Partners

Elbit Imaging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elbit Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elbit Imaging is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Brookfield Property

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Property Partners are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Brookfield Property displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elbit Imaging and Brookfield Property

The main advantage of trading using opposite Elbit Imaging and Brookfield Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elbit Imaging 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.

The idea behind Elbit Imaging and Brookfield Property Partners 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.