Correlation Between Brookfield Corp and Futu Holdings
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and Futu Holdings 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 Futu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and Futu Holdings, you can compare the effects of market volatilities on Brookfield Corp and Futu Holdings 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 Futu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and Futu Holdings.
Diversification Opportunities for Brookfield Corp and Futu Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Futu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Futu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futu Holdings 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 Futu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futu Holdings has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Futu Holdings go up and down completely randomly.
Pair Corralation between Brookfield Corp and Futu Holdings
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 0.3 times more return on investment than Futu Holdings. However, Brookfield Corp is 3.36 times less risky than Futu Holdings. It trades about 0.38 of its potential returns per unit of risk. Futu Holdings is currently generating about -0.07 per unit of risk. If you would invest 5,404 in Brookfield Corp on August 31, 2024 and sell it today you would earn a total of 733.00 from holding Brookfield Corp or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. Futu Holdings
Performance |
| Timeline |
| Brookfield Corp |
| Futu Holdings |
Brookfield Corp and Futu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and Futu Holdings
The main advantage of trading using opposite Brookfield Corp and Futu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, Futu Holdings 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 Futu Holdings will offset losses from the drop in Futu Holdings' 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 |
| Futu Holdings vs. Bit Digital | Futu Holdings vs. Xp Inc | Futu Holdings vs. Magic Empire Global | Futu Holdings vs. Applied Blockchain |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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