Correlation Between Brookfield Asset and Topicus
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset and Topicus 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 Asset and Topicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Asset Management and Topicus, you can compare the effects of market volatilities on Brookfield Asset and Topicus 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 Asset with a short position of Topicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Topicus.
Diversification Opportunities for Brookfield Asset and Topicus
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and Topicus is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Topicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topicus and Brookfield Asset 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 Asset Management are associated (or correlated) with Topicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topicus has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Topicus go up and down completely randomly.
Pair Corralation between Brookfield Asset and Topicus
Assuming the 90 days trading horizon Brookfield Asset Management is expected to generate 0.79 times more return on investment than Topicus. However, Brookfield Asset Management is 1.27 times less risky than Topicus. It trades about 0.13 of its potential returns per unit of risk. Topicus is currently generating about 0.07 per unit of risk. If you would invest 7,935 in Brookfield Asset Management on September 13, 2024 and sell it today you would earn a total of 284.00 from holding Brookfield Asset Management or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Asset Management vs. Topicus
Performance |
| Timeline |
| Brookfield Asset Man |
| Topicus |
Brookfield Asset and Topicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and Topicus
The main advantage of trading using opposite Brookfield Asset and Topicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset position performs unexpectedly, Topicus 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 Topicus will offset losses from the drop in Topicus' long position.| Brookfield Asset vs. Fairfax Financial Holdings | Brookfield Asset vs. Partners Value Investments | Brookfield Asset vs. Brookfield Investments | Brookfield Asset vs. Western Investment |
| Topicus vs. Constellation Software | Topicus vs. Converge Technology Solutions | Topicus vs. Enghouse Systems | Topicus vs. Dye Durham |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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