Correlation Between Nicola Mining and Brookfield Office

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

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

Diversification Opportunities for Nicola Mining and Brookfield Office

-0.68

Correlation Coefficient

Nicola Mining  Brookfield Office

Excellent diversification

The 3 months correlation between Nicola and Brookfield is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nicola Mining and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office and Nicola Mining 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 Nicola Mining 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 Nicola Mining i.e., Nicola Mining and Brookfield Office go up and down completely randomly.

Pair Corralation between Nicola Mining and Brookfield Office

Assuming the 90 days horizon Nicola Mining is expected to generate 4.09 times more return on investment than Brookfield Office. However, Nicola Mining is 4.09 times more volatile than Brookfield Office Properties. It trades about 0.04 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.02 per unit of risk. If you would invest  22.00  in Nicola Mining on September 20, 2024 and sell it today you would earn a total of  6.00  from holding Nicola Mining or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Nicola Mining  vs.  Brookfield Office Properties

Nicola Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nicola Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Brookfield Office

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Office Properties are ranked lower than 11 (%) 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 January 2025.

Pair Trading with Nicola Mining and Brookfield Office

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

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