Correlation Between Brookfield Corp and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and Bayview Acquisition 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 Corp and Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and Bayview Acquisition Corp, you can compare the effects of market volatilities on Brookfield Corp and Bayview Acquisition 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 Corp with a short position of Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and Bayview Acquisition.
Diversification Opportunities for Brookfield Corp and Bayview Acquisition
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and Bayview is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp and Brookfield Corp 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 Corp are associated (or correlated) with Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Brookfield Corp and Bayview Acquisition
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 19.01 times more return on investment than Bayview Acquisition. However, Brookfield Corp is 19.01 times more volatile than Bayview Acquisition Corp. It trades about 0.48 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.11 per unit of risk. If you would invest 5,300 in Brookfield Corp on September 1, 2024 and sell it today you would earn a total of 839.00 from holding Brookfield Corp or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. Bayview Acquisition Corp
Performance |
| Timeline |
| Brookfield Corp |
| Bayview Acquisition Corp |
Brookfield Corp and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and Bayview Acquisition
The main advantage of trading using opposite Brookfield Corp and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, Bayview Acquisition 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
| Bayview Acquisition vs. Visa Class A | Bayview Acquisition vs. Diamond Hill Investment | Bayview Acquisition vs. Distoken Acquisition | Bayview Acquisition vs. AllianceBernstein Holding LP |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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