Correlation Between Brookfield Business and Greenbrier Companies
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and Greenbrier Companies 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 Greenbrier Companies 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 Greenbrier Companies, you can compare the effects of market volatilities on Brookfield Business and Greenbrier Companies 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 Greenbrier Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Greenbrier Companies.
Diversification Opportunities for Brookfield Business and Greenbrier Companies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brookfield and Greenbrier is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Partners and Greenbrier Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenbrier Companies 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 Greenbrier Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenbrier Companies has no effect on the direction of Brookfield Business i.e., Brookfield Business and Greenbrier Companies go up and down completely randomly.
Pair Corralation between Brookfield Business and Greenbrier Companies
Considering the 90-day investment horizon Brookfield Business Partners is expected to generate 1.18 times more return on investment than Greenbrier Companies. However, Brookfield Business is 1.18 times more volatile than Greenbrier Companies. It trades about 0.03 of its potential returns per unit of risk. Greenbrier Companies is currently generating about -0.08 per unit of risk. If you would invest 2,441 in Brookfield Business Partners on November 18, 2024 and sell it today you would earn a total of 54.00 from holding Brookfield Business Partners or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Business Partners vs. Greenbrier Companies
Performance |
| Timeline |
| Brookfield Business |
| Greenbrier Companies |
Brookfield Business and Greenbrier Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and Greenbrier Companies
The main advantage of trading using opposite Brookfield Business and Greenbrier Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, Greenbrier Companies 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 Greenbrier Companies will offset losses from the drop in Greenbrier Companies' long position.| Brookfield Business vs. Steel Partners Holdings | Brookfield Business vs. Compass Diversified | Brookfield Business vs. Matthews International | Brookfield Business vs. Tejon Ranch Co |
| Greenbrier Companies vs. LB Foster | Greenbrier Companies vs. Freightcar America | Greenbrier Companies vs. Westinghouse Air Brake | Greenbrier Companies vs. CSX Corporation |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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