Correlation Between Air Products and Brookfield Finance
Can any of the company-specific risk be diversified away by investing in both Air Products and Brookfield Finance 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 Air Products and Brookfield Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Brookfield Finance I, you can compare the effects of market volatilities on Air Products and Brookfield Finance 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 Air Products with a short position of Brookfield Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Brookfield Finance.
Diversification Opportunities for Air Products and Brookfield Finance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Air and Brookfield is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Brookfield Finance I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Finance and Air Products 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 Air Products and are associated (or correlated) with Brookfield Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Finance has no effect on the direction of Air Products i.e., Air Products and Brookfield Finance go up and down completely randomly.
Pair Corralation between Air Products and Brookfield Finance
If you would invest 1,506 in Brookfield Finance I on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Brookfield Finance I or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Air Products and vs. Brookfield Finance I
Performance |
| Timeline |
| Air Products |
| Brookfield Finance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Air Products and Brookfield Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Brookfield Finance
The main advantage of trading using opposite Air Products and Brookfield Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Brookfield Finance 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 Finance will offset losses from the drop in Brookfield Finance's long position.| Air Products vs. Griffon | Air Products vs. Merck Company | Air Products vs. Brinker International | Air Products vs. Alcoa Corp |
| Brookfield Finance vs. HF Sinclair Corp | Brookfield Finance vs. Ryanair Holdings PLC | Brookfield Finance vs. Figs Inc | Brookfield Finance vs. Alaska Air Group |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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