Correlation Between Brompton Enhanced and Forstrong Global
Can any of the company-specific risk be diversified away by investing in both Brompton Enhanced and Forstrong Global 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 Brompton Enhanced and Forstrong Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Enhanced Multi Asset and Forstrong Global Income, you can compare the effects of market volatilities on Brompton Enhanced and Forstrong Global 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 Brompton Enhanced with a short position of Forstrong Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Enhanced and Forstrong Global.
Diversification Opportunities for Brompton Enhanced and Forstrong Global
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brompton and Forstrong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Enhanced Multi Asset and Forstrong Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global Income and Brompton Enhanced 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 Brompton Enhanced Multi Asset are associated (or correlated) with Forstrong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forstrong Global Income has no effect on the direction of Brompton Enhanced i.e., Brompton Enhanced and Forstrong Global go up and down completely randomly.
Pair Corralation between Brompton Enhanced and Forstrong Global
Assuming the 90 days trading horizon Brompton Enhanced Multi Asset is expected to generate 1.88 times more return on investment than Forstrong Global. However, Brompton Enhanced is 1.88 times more volatile than Forstrong Global Income. It trades about 0.29 of its potential returns per unit of risk. Forstrong Global Income is currently generating about -0.08 per unit of risk. If you would invest 1,382 in Brompton Enhanced Multi Asset on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Brompton Enhanced Multi Asset or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brompton Enhanced Multi Asset vs. Forstrong Global Income
Performance |
| Timeline |
| Brompton Enhanced Multi |
| Forstrong Global Income |
Brompton Enhanced and Forstrong Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Enhanced and Forstrong Global
The main advantage of trading using opposite Brompton Enhanced and Forstrong Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Enhanced position performs unexpectedly, Forstrong Global 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 Forstrong Global will offset losses from the drop in Forstrong Global's long position.| Brompton Enhanced vs. Forstrong Global Income | Brompton Enhanced vs. iShares Canadian HYBrid | Brompton Enhanced vs. Brompton European Dividend | Brompton Enhanced vs. Solar Alliance Energy |
| Forstrong Global vs. iShares SPTSX 60 | Forstrong Global vs. iShares Core SP | Forstrong Global vs. iShares Core SPTSX | Forstrong Global vs. BMO Aggregate Bond |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |