Correlation Between Canadian General and Brookfield Investments
Can any of the company-specific risk be diversified away by investing in both Canadian General and Brookfield Investments 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 Canadian General and Brookfield Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Brookfield Investments, you can compare the effects of market volatilities on Canadian General and Brookfield Investments 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 Canadian General with a short position of Brookfield Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Brookfield Investments.
Diversification Opportunities for Canadian General and Brookfield Investments
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Brookfield is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments and Canadian General 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 Canadian General Investments are associated (or correlated) with Brookfield Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of Canadian General i.e., Canadian General and Brookfield Investments go up and down completely randomly.
Pair Corralation between Canadian General and Brookfield Investments
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 2.43 times more return on investment than Brookfield Investments. However, Canadian General is 2.43 times more volatile than Brookfield Investments. It trades about 0.07 of its potential returns per unit of risk. Brookfield Investments is currently generating about 0.04 per unit of risk. If you would invest 3,874 in Canadian General Investments on August 24, 2024 and sell it today you would earn a total of 180.00 from holding Canadian General Investments or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Canadian General Investments vs. Brookfield Investments
Performance |
| Timeline |
| Canadian General Inv |
| Brookfield Investments |
Canadian General and Brookfield Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Brookfield Investments
The main advantage of trading using opposite Canadian General and Brookfield Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Brookfield Investments 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 Investments will offset losses from the drop in Brookfield Investments' long position.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| Brookfield Investments vs. 2028 Investment Grade | Brookfield Investments vs. NeXGold Mining Corp | Brookfield Investments vs. Economic Investment Trust | Brookfield Investments vs. Rogers Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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