Correlation Between Brookfield Asset and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset and Investcorp Europe 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 Investcorp Europe 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 Investcorp Europe Acquisition, you can compare the effects of market volatilities on Brookfield Asset and Investcorp Europe 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 Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Investcorp Europe.
Diversification Opportunities for Brookfield Asset and Investcorp Europe
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and Investcorp is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe 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 Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Investcorp Europe go up and down completely randomly.
Pair Corralation between Brookfield Asset and Investcorp Europe
Considering the 90-day investment horizon Brookfield Asset is expected to generate 158.57 times less return on investment than Investcorp Europe. But when comparing it to its historical volatility, Brookfield Asset Management is 118.53 times less risky than Investcorp Europe. It trades about 0.12 of its potential returns per unit of risk. Investcorp Europe Acquisition is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Investcorp Europe Acquisition on September 1, 2024 and sell it today you would lose (22.72) from holding Investcorp Europe Acquisition or give up 94.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 45.74% |
| Values | Daily Returns |
Brookfield Asset Management vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| Brookfield Asset Man |
| Investcorp Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Brookfield Asset and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and Investcorp Europe
The main advantage of trading using opposite Brookfield Asset and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe's long position.| Brookfield Asset vs. KKR Co LP | Brookfield Asset vs. Blackstone Group | Brookfield Asset vs. Apollo Global Management | Brookfield Asset vs. T Rowe Price |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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