Correlation Between Brookfield Asset and Winpak
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset and Winpak 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 Winpak 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 Winpak, you can compare the effects of market volatilities on Brookfield Asset and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Winpak.
Diversification Opportunities for Brookfield Asset and Winpak
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Winpak is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Winpak go up and down completely randomly.
Pair Corralation between Brookfield Asset and Winpak
Assuming the 90 days trading horizon Brookfield Asset Management is expected to generate 0.52 times more return on investment than Winpak. However, Brookfield Asset Management is 1.94 times less risky than Winpak. It trades about 0.51 of its potential returns per unit of risk. Winpak is currently generating about -0.05 per unit of risk. If you would invest 1,135 in Brookfield Asset Management on September 13, 2024 and sell it today you would earn a total of 115.00 from holding Brookfield Asset Management or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Asset Management vs. Winpak
Performance |
| Timeline |
| Brookfield Asset Man |
| Winpak |
Brookfield Asset and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and Winpak
The main advantage of trading using opposite Brookfield Asset and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Brookfield Asset vs. GOLDMAN SACHS CDR | Brookfield Asset vs. Galaxy Digital Holdings | Brookfield Asset vs. Hut 8 Mining | Brookfield Asset vs. Bitfarms |
| Winpak vs. Data Communications Management | Winpak vs. Hemisphere Energy | Winpak vs. Queens Road Capital | Winpak vs. Forsys Metals Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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