Correlation Between Brookfield and Boyd Group
Can any of the company-specific risk be diversified away by investing in both Brookfield and Boyd Group 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 Boyd Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield and Boyd Group Services, you can compare the effects of market volatilities on Brookfield and Boyd Group 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 Boyd Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield and Boyd Group.
Diversification Opportunities for Brookfield and Boyd Group
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and Boyd is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and Boyd Group Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Group Services 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 Boyd Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Group Services has no effect on the direction of Brookfield i.e., Brookfield and Boyd Group go up and down completely randomly.
Pair Corralation between Brookfield and Boyd Group
Assuming the 90 days horizon Brookfield is expected to generate 0.8 times more return on investment than Boyd Group. However, Brookfield is 1.25 times less risky than Boyd Group. It trades about 0.16 of its potential returns per unit of risk. Boyd Group Services is currently generating about -0.17 per unit of risk. If you would invest 8,076 in Brookfield on September 13, 2024 and sell it today you would earn a total of 350.00 from holding Brookfield or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield vs. Boyd Group Services
Performance |
| Timeline |
| Brookfield |
| Boyd Group Services |
Brookfield and Boyd Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield and Boyd Group
The main advantage of trading using opposite Brookfield and Boyd Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield position performs unexpectedly, Boyd Group 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 Boyd Group will offset losses from the drop in Boyd Group's long position.| Brookfield vs. Brookfield Asset Management | Brookfield vs. Alimentation Couchen Tard | Brookfield vs. Brookfield Infrastructure Partners | Brookfield vs. Brookfield Infrastructure Corp |
| Boyd Group vs. Colliers International Group | Boyd Group vs. Premium Brands Holdings | Boyd Group vs. FirstService Corp | Boyd Group vs. Enghouse Systems |
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.
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