Correlation Between Brookfield Corp and Newtek Business
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and Newtek Business 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 Newtek Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and Newtek Business Services, you can compare the effects of market volatilities on Brookfield Corp and Newtek Business 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 Newtek Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and Newtek Business.
Diversification Opportunities for Brookfield Corp and Newtek Business
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and Newtek is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Newtek Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtek Business Services 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 Newtek Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtek Business Services has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Newtek Business go up and down completely randomly.
Pair Corralation between Brookfield Corp and Newtek Business
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 0.97 times more return on investment than Newtek Business. However, Brookfield Corp is 1.03 times less risky than Newtek Business. It trades about 0.14 of its potential returns per unit of risk. Newtek Business Services is currently generating about -0.02 per unit of risk. If you would invest 5,818 in Brookfield Corp on November 18, 2024 and sell it today you would earn a total of 274.00 from holding Brookfield Corp or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. Newtek Business Services
Performance |
| Timeline |
| Brookfield Corp |
| Newtek Business Services |
Brookfield Corp and Newtek Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and Newtek Business
The main advantage of trading using opposite Brookfield Corp and Newtek Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, Newtek Business 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 Newtek Business will offset losses from the drop in Newtek Business' long position.| Brookfield Corp vs. Horizon Space Acquisition | Brookfield Corp vs. Erayak Power Solution | Brookfield Corp vs. AlphaTime Acquisition Corp | Brookfield Corp vs. Israel Acquisitions Corp |
| Newtek Business vs. First Community | Newtek Business vs. Old Point Financial | Newtek Business vs. Oak Valley Bancorp | Newtek Business vs. Chemung 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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