Correlation Between Brookfield Business and Current Water
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and Current Water 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 Business and Current Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Business Partners and Current Water Technologies, you can compare the effects of market volatilities on Brookfield Business and Current Water 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 Business with a short position of Current Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Current Water.
Diversification Opportunities for Brookfield Business and Current Water
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Current is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Partners and Current Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Current Water Techno and Brookfield Business 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 Business Partners are associated (or correlated) with Current Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Current Water Techno has no effect on the direction of Brookfield Business i.e., Brookfield Business and Current Water go up and down completely randomly.
Pair Corralation between Brookfield Business and Current Water
Assuming the 90 days trading horizon Brookfield Business Partners is expected to generate 0.13 times more return on investment than Current Water. However, Brookfield Business Partners is 7.44 times less risky than Current Water. It trades about 0.05 of its potential returns per unit of risk. Current Water Technologies is currently generating about -0.05 per unit of risk. If you would invest 3,475 in Brookfield Business Partners on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Brookfield Business Partners or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Business Partners vs. Current Water Technologies
Performance |
| Timeline |
| Brookfield Business |
| Current Water Techno |
Brookfield Business and Current Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and Current Water
The main advantage of trading using opposite Brookfield Business and Current Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, Current Water 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 Current Water will offset losses from the drop in Current Water's long position.| Brookfield Business vs. Current Water Technologies | Brookfield Business vs. Plurilock Security | Brookfield Business vs. PowerBand Solutions | Brookfield Business vs. iShares Canadian HYBrid |
| Current Water vs. Plurilock Security | Current Water vs. PowerBand Solutions | Current Water vs. iShares Canadian HYBrid | Current Water vs. Solar Alliance Energy |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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