Correlation Between Brookfield Asset and China Everbright
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset and China Everbright 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 China Everbright 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 China Everbright Limited, you can compare the effects of market volatilities on Brookfield Asset and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and China Everbright.
Diversification Opportunities for Brookfield Asset and China Everbright
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and China is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and China Everbright Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and China Everbright go up and down completely randomly.
Pair Corralation between Brookfield Asset and China Everbright
If you would invest 68.00 in China Everbright Limited on September 2, 2024 and sell it today you would earn a total of 0.00 from holding China Everbright Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Brookfield Asset Management vs. China Everbright Limited
Performance |
| Timeline |
| Brookfield Asset Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Everbright |
Brookfield Asset and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and China Everbright
The main advantage of trading using opposite Brookfield Asset and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.| Brookfield Asset vs. AGF Management Limited | Brookfield Asset vs. Nuveen New York | Brookfield Asset vs. European Equity Closed | Brookfield Asset vs. Nuveen New York |
| China Everbright vs. KKR Co LP | China Everbright vs. Apollo Global Management | China Everbright vs. TPG Inc | China Everbright vs. Blackstone 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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