Correlation Between Brookfield Business and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and Ascot 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 Ascot 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 Ascot Resources, you can compare the effects of market volatilities on Brookfield Business and Ascot 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 Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Ascot Resources.
Diversification Opportunities for Brookfield Business and Ascot Resources
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brookfield and Ascot is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot 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 Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Brookfield Business i.e., Brookfield Business and Ascot Resources go up and down completely randomly.
Pair Corralation between Brookfield Business and Ascot Resources
Assuming the 90 days trading horizon Brookfield Business Corp is expected to generate 0.4 times more return on investment than Ascot Resources. However, Brookfield Business Corp is 2.5 times less risky than Ascot Resources. It trades about 0.05 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.03 per unit of risk. If you would invest 2,571 in Brookfield Business Corp on November 27, 2024 and sell it today you would earn a total of 1,219 from holding Brookfield Business Corp or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Business Corp vs. Ascot Resources
Performance |
| Timeline |
| Brookfield Business Corp |
| Ascot Resources |
Brookfield Business and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and Ascot Resources
The main advantage of trading using opposite Brookfield Business and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, Ascot 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Brookfield Business vs. Exco Technologies Limited | Brookfield Business vs. Calian Technologies | Brookfield Business vs. Economic Investment Trust | Brookfield Business vs. Western Investment |
| Ascot Resources vs. First National Financial | Ascot Resources vs. Calian Technologies | Ascot Resources vs. Canso Credit Trust | Ascot Resources vs. BLUERUSH Media 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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