Correlation Between Economic Investment and Brookfield
Can any of the company-specific risk be diversified away by investing in both Economic Investment and Brookfield 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 Economic Investment and Brookfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and Brookfield, you can compare the effects of market volatilities on Economic Investment and Brookfield 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 Economic Investment with a short position of Brookfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Brookfield.
Diversification Opportunities for Economic Investment and Brookfield
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Economic and Brookfield is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Economic Investment 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 Economic Investment Trust are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Economic Investment i.e., Economic Investment and Brookfield go up and down completely randomly.
Pair Corralation between Economic Investment and Brookfield
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.75 times more return on investment than Brookfield. However, Economic Investment Trust is 1.33 times less risky than Brookfield. It trades about 0.1 of its potential returns per unit of risk. Brookfield is currently generating about 0.03 per unit of risk. If you would invest 11,406 in Economic Investment Trust on August 30, 2024 and sell it today you would earn a total of 6,044 from holding Economic Investment Trust or generate 52.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Economic Investment Trust vs. Brookfield
Performance |
| Timeline |
| Economic Investment Trust |
| Brookfield |
Economic Investment and Brookfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and Brookfield
The main advantage of trading using opposite Economic Investment and Brookfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment position performs unexpectedly, Brookfield 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 will offset losses from the drop in Brookfield's long position.| Economic Investment vs. Canadian Natural Resources | Economic Investment vs. Suncor Energy | Economic Investment vs. iShares Canadian HYBrid | Economic Investment vs. Altagas Cum Red |
| Brookfield vs. Falcon Energy Materials | Brookfield vs. Quorum Information Technologies | Brookfield vs. VIP Entertainment Technologies | Brookfield vs. Thunderbird Entertainment Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |