Correlation Between Brookfield Business and Anfield Resources
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and Anfield Resources 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 Anfield Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Business Corp and Anfield Resources, you can compare the effects of market volatilities on Brookfield Business and Anfield Resources 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 Anfield Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Anfield Resources.
Diversification Opportunities for Brookfield Business and Anfield Resources
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Anfield is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources 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 Corp are associated (or correlated) with Anfield Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Resources has no effect on the direction of Brookfield Business i.e., Brookfield Business and Anfield Resources go up and down completely randomly.
Pair Corralation between Brookfield Business and Anfield Resources
Assuming the 90 days trading horizon Brookfield Business Corp is expected to generate 0.28 times more return on investment than Anfield Resources. However, Brookfield Business Corp is 3.54 times less risky than Anfield Resources. It trades about 0.02 of its potential returns per unit of risk. Anfield Resources is currently generating about -0.07 per unit of risk. If you would invest 3,718 in Brookfield Business Corp on November 18, 2024 and sell it today you would earn a total of 36.00 from holding Brookfield Business Corp or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Business Corp vs. Anfield Resources
Performance |
| Timeline |
| Brookfield Business Corp |
| Anfield Resources |
Brookfield Business and Anfield Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and Anfield Resources
The main advantage of trading using opposite Brookfield Business and Anfield Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, Anfield Resources 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 Anfield Resources will offset losses from the drop in Anfield Resources' long position.| Brookfield Business vs. Adex Mining | Brookfield Business vs. Medical Facilities | Brookfield Business vs. Dream Industrial Real | Brookfield Business vs. NeXGold Mining Corp |
| Anfield Resources vs. enCore Energy Corp | Anfield Resources vs. Fission 30 Corp | Anfield Resources vs. Forsys Metals Corp | Anfield Resources vs. Eros Resources Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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