Correlation Between Brookfield and Theratechnologies
Can any of the company-specific risk be diversified away by investing in both Brookfield and Theratechnologies 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 and Theratechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield and Theratechnologies, you can compare the effects of market volatilities on Brookfield and Theratechnologies 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 with a short position of Theratechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield and Theratechnologies.
Diversification Opportunities for Brookfield and Theratechnologies
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Theratechnologies is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and Theratechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theratechnologies and Brookfield 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 are associated (or correlated) with Theratechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theratechnologies has no effect on the direction of Brookfield i.e., Brookfield and Theratechnologies go up and down completely randomly.
Pair Corralation between Brookfield and Theratechnologies
Assuming the 90 days trading horizon Brookfield is expected to generate 0.18 times more return on investment than Theratechnologies. However, Brookfield is 5.62 times less risky than Theratechnologies. It trades about 0.07 of its potential returns per unit of risk. Theratechnologies is currently generating about -0.02 per unit of risk. If you would invest 1,802 in Brookfield on August 29, 2024 and sell it today you would earn a total of 554.00 from holding Brookfield or generate 30.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield vs. Theratechnologies
Performance |
| Timeline |
| Brookfield |
| Theratechnologies |
Brookfield and Theratechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield and Theratechnologies
The main advantage of trading using opposite Brookfield and Theratechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield position performs unexpectedly, Theratechnologies 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 Theratechnologies will offset losses from the drop in Theratechnologies' long position.| Brookfield vs. Wilmington Capital Management | Brookfield vs. NeuPath Health | Brookfield vs. Goodfood Market Corp | Brookfield vs. SalesforceCom CDR |
| Theratechnologies vs. Resverlogix Corp | Theratechnologies vs. iShares Canadian HYBrid | Theratechnologies vs. Altagas Cum Red | Theratechnologies vs. European Residential Real |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |