Correlation Between Brookfield Business and FAM
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and FAM 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 FAM 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 FAM, you can compare the effects of market volatilities on Brookfield Business and FAM 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 FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and FAM.
Diversification Opportunities for Brookfield Business and FAM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and FAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM 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 FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Brookfield Business i.e., Brookfield Business and FAM go up and down completely randomly.
Pair Corralation between Brookfield Business and FAM
If you would invest 2,403 in Brookfield Business Corp on November 27, 2024 and sell it today you would earn a total of 266.00 from holding Brookfield Business Corp or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Brookfield Business Corp vs. FAM
Performance |
| Timeline |
| Brookfield Business Corp |
| FAM |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Brookfield Business and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and FAM
The main advantage of trading using opposite Brookfield Business and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM's long position.| Brookfield Business vs. Elysee Development Corp | Brookfield Business vs. DWS Municipal Income | Brookfield Business vs. Blackrock Munivest | Brookfield Business vs. Blackrock Muniholdings Closed |
| FAM vs. Blackstone Gso Long | FAM vs. Blackstone Gso Senior | FAM vs. Nuveen Floating Rate | FAM vs. Pioneer Floating Rate |
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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