Correlation Between Brookfield Investments and Stroud Resources
Can any of the company-specific risk be diversified away by investing in both Brookfield Investments and Stroud Resources 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 Stroud Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Investments and Stroud Resources, you can compare the effects of market volatilities on Brookfield Investments and Stroud Resources 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 Stroud Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Investments and Stroud Resources.
Diversification Opportunities for Brookfield Investments and Stroud Resources
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Stroud is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Investments and Stroud Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stroud Resources 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 Stroud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stroud Resources has no effect on the direction of Brookfield Investments i.e., Brookfield Investments and Stroud Resources go up and down completely randomly.
Pair Corralation between Brookfield Investments and Stroud Resources
Assuming the 90 days trading horizon Brookfield Investments is expected to generate 0.15 times more return on investment than Stroud Resources. However, Brookfield Investments is 6.71 times less risky than Stroud Resources. It trades about 0.19 of its potential returns per unit of risk. Stroud Resources is currently generating about -0.05 per unit of risk. If you would invest 2,452 in Brookfield Investments on December 4, 2024 and sell it today you would earn a total of 49.00 from holding Brookfield Investments or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.0% |
| Values | Daily Returns |
Brookfield Investments vs. Stroud Resources
Performance |
| Timeline |
| Brookfield Investments |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Stroud Resources |
Brookfield Investments and Stroud Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Investments and Stroud Resources
The main advantage of trading using opposite Brookfield Investments and Stroud Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Investments position performs unexpectedly, Stroud Resources 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 Stroud Resources will offset losses from the drop in Stroud Resources' long position.| Brookfield Investments vs. Apple Inc CDR | Brookfield Investments vs. NVIDIA CDR | Brookfield Investments vs. Microsoft Corp CDR | Brookfield Investments vs. Amazon CDR |
| Stroud Resources vs. Eskay Mining Corp | Stroud Resources vs. XXIX Metal Corp | Stroud Resources vs. Adex Mining | Stroud Resources vs. Pace Metals |
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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