Correlation Between CBH and Brookfield Business
Can any of the company-specific risk be diversified away by investing in both CBH and Brookfield 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 CBH and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and Brookfield Business Corp, you can compare the effects of market volatilities on CBH and Brookfield 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 CBH with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Brookfield Business.
Diversification Opportunities for CBH and Brookfield Business
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBH and Brookfield is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Brookfield Business Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business Corp and CBH 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 CBH are associated (or correlated) with Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business Corp has no effect on the direction of CBH i.e., CBH and Brookfield Business go up and down completely randomly.
Pair Corralation between CBH and Brookfield Business
If you would invest 2,375 in Brookfield Business Corp on August 31, 2024 and sell it today you would earn a total of 384.00 from holding Brookfield Business Corp or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
CBH vs. Brookfield Business Corp
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Brookfield Business Corp |
CBH and Brookfield Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and Brookfield Business
The main advantage of trading using opposite CBH and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, Brookfield 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 Brookfield Business will offset losses from the drop in Brookfield Business' long position.| CBH vs. Eaton Vance National | CBH vs. Invesco High Income | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select |
| Brookfield Business vs. Elysee Development Corp | Brookfield Business vs. DWS Municipal Income | Brookfield Business vs. Blackrock Munivest | Brookfield Business vs. Blackrock Muniholdings Closed |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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