Correlation Between Brookfield and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Brookfield and Ballard Power 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 Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield and Ballard Power Systems, you can compare the effects of market volatilities on Brookfield and Ballard Power 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 Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield and Ballard Power.
Diversification Opportunities for Brookfield and Ballard Power
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and Ballard is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems 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 Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Brookfield i.e., Brookfield and Ballard Power go up and down completely randomly.
Pair Corralation between Brookfield and Ballard Power
Assuming the 90 days horizon Brookfield is expected to generate 0.41 times more return on investment than Ballard Power. However, Brookfield is 2.41 times less risky than Ballard Power. It trades about 0.18 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.09 per unit of risk. If you would invest 5,489 in Brookfield on September 4, 2024 and sell it today you would earn a total of 3,154 from holding Brookfield or generate 57.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield vs. Ballard Power Systems
Performance |
| Timeline |
| Brookfield |
| Ballard Power Systems |
Brookfield and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield and Ballard Power
The main advantage of trading using opposite Brookfield and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Brookfield vs. Brookfield Asset Management | Brookfield vs. Alimentation Couchen Tard | Brookfield vs. Brookfield Infrastructure Partners | Brookfield vs. Brookfield Infrastructure Corp |
| Ballard Power vs. Brookfield Office Properties | Ballard Power vs. Toronto Dominion Bank | Ballard Power vs. Partners Value Investments | Ballard Power vs. Intact Financial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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