Correlation Between Brookfield Property and DigitalBridge

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

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

Diversification Opportunities for Brookfield Property and DigitalBridge

0.66

Correlation Coefficient

Brookfield Property  DigitalBridge

Poor diversification

The 3 months correlation between Brookfield and DigitalBridge is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Property Partners and DigitalBridge Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigitalBridge Group and Brookfield Property 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 Property Partners are associated (or correlated) with DigitalBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigitalBridge Group has no effect on the direction of Brookfield Property i.e., Brookfield Property and DigitalBridge go up and down completely randomly.

Pair Corralation between Brookfield Property and DigitalBridge

Assuming the 90 days horizon Brookfield Property Partners is expected to generate 2.12 times more return on investment than DigitalBridge. However, Brookfield Property is 2.12 times more volatile than DigitalBridge Group. It trades about 0.06 of its potential returns per unit of risk. DigitalBridge Group is currently generating about 0.09 per unit of risk. If you would invest  1,467  in Brookfield Property Partners on September 13, 2024 and sell it today you would earn a total of  107.00  from holding Brookfield Property Partners or generate 7.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Brookfield Property Partners  vs.  DigitalBridge Group

Brookfield Property

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Property Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Brookfield Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DigitalBridge Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DigitalBridge Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, DigitalBridge is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Brookfield Property and DigitalBridge

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

The idea behind Brookfield Property Partners and DigitalBridge Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..