Correlation Between Brookfield Business and New Mountain
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and New Mountain 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 New Mountain 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 New Mountain Finance, you can compare the effects of market volatilities on Brookfield Business and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and New Mountain.
Diversification Opportunities for Brookfield Business and New Mountain
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and New is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Brookfield Business i.e., Brookfield Business and New Mountain go up and down completely randomly.
Pair Corralation between Brookfield Business and New Mountain
Given the investment horizon of 90 days Brookfield Business is expected to generate 4.03 times less return on investment than New Mountain. In addition to that, Brookfield Business is 1.83 times more volatile than New Mountain Finance. It trades about 0.03 of its total potential returns per unit of risk. New Mountain Finance is currently generating about 0.21 per unit of volatility. If you would invest 1,137 in New Mountain Finance on September 12, 2024 and sell it today you would earn a total of 43.00 from holding New Mountain Finance or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Business Corp vs. New Mountain Finance
Performance |
| Timeline |
| Brookfield Business Corp |
| New Mountain Finance |
Brookfield Business and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and New Mountain
The main advantage of trading using opposite Brookfield Business and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain'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 |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |