Correlation Between Brookfield Asset and Canso Credit
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset and Canso Credit 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 Asset and Canso Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Asset Management and Canso Credit Trust, you can compare the effects of market volatilities on Brookfield Asset and Canso Credit 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 Asset with a short position of Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Canso Credit.
Diversification Opportunities for Brookfield Asset and Canso Credit
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and Canso is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Canso Credit Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Credit Trust and Brookfield Asset 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 Asset Management are associated (or correlated) with Canso Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Credit Trust has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Canso Credit go up and down completely randomly.
Pair Corralation between Brookfield Asset and Canso Credit
Assuming the 90 days trading horizon Brookfield Asset Management is expected to generate 2.04 times more return on investment than Canso Credit. However, Brookfield Asset is 2.04 times more volatile than Canso Credit Trust. It trades about 0.07 of its potential returns per unit of risk. Canso Credit Trust is currently generating about 0.08 per unit of risk. If you would invest 955.00 in Brookfield Asset Management on August 31, 2024 and sell it today you would earn a total of 265.00 from holding Brookfield Asset Management or generate 27.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Asset Management vs. Canso Credit Trust
Performance |
| Timeline |
| Brookfield Asset Man |
| Canso Credit Trust |
Brookfield Asset and Canso Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and Canso Credit
The main advantage of trading using opposite Brookfield Asset and Canso Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset position performs unexpectedly, Canso Credit 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 Canso Credit will offset losses from the drop in Canso Credit's long position.| Brookfield Asset vs. iShares Canadian HYBrid | Brookfield Asset vs. Brompton European Dividend | Brookfield Asset vs. Solar Alliance Energy | Brookfield Asset vs. PHN Multi Style All Cap |
| Canso Credit vs. MINT Income Fund | Canso Credit vs. Canadian High Income | Canso Credit vs. Blue Ribbon Income | Canso Credit vs. Australian REIT Income |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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