Correlation Between Brookfield Investments and Magnum Goldcorp
Can any of the company-specific risk be diversified away by investing in both Brookfield Investments and Magnum Goldcorp 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 Investments and Magnum Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Investments and Magnum Goldcorp, you can compare the effects of market volatilities on Brookfield Investments and Magnum Goldcorp 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 Investments with a short position of Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Investments and Magnum Goldcorp.
Diversification Opportunities for Brookfield Investments and Magnum Goldcorp
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brookfield and Magnum is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Investments and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp and Brookfield Investments 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 Investments are associated (or correlated) with Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of Brookfield Investments i.e., Brookfield Investments and Magnum Goldcorp go up and down completely randomly.
Pair Corralation between Brookfield Investments and Magnum Goldcorp
Assuming the 90 days trading horizon Brookfield Investments is expected to generate 1438.71 times less return on investment than Magnum Goldcorp. But when comparing it to its historical volatility, Brookfield Investments is 45.81 times less risky than Magnum Goldcorp. It trades about 0.0 of its potential returns per unit of risk. Magnum Goldcorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Magnum Goldcorp on August 26, 2024 and sell it today you would lose (7.00) from holding Magnum Goldcorp or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 51.81% |
| Values | Daily Returns |
Brookfield Investments vs. Magnum Goldcorp
Performance |
| Timeline |
| Brookfield Investments |
| Magnum Goldcorp |
Brookfield Investments and Magnum Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Investments and Magnum Goldcorp
The main advantage of trading using opposite Brookfield Investments and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Investments position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp's long position.| Brookfield Investments vs. Reliq Health Technologies | Brookfield Investments vs. Stampede Drilling | Brookfield Investments vs. Precision Drilling | Brookfield Investments vs. Partners Value Investments |
| Magnum Goldcorp vs. 2028 Investment Grade | Magnum Goldcorp vs. Brookfield Investments | Magnum Goldcorp vs. T2 Metals Corp | Magnum Goldcorp vs. Partners Value Investments |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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