Correlation Between FirstCash and Brookfield Corp
Can any of the company-specific risk be diversified away by investing in both FirstCash and Brookfield Corp 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 FirstCash and Brookfield Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Brookfield Corp, you can compare the effects of market volatilities on FirstCash and Brookfield Corp 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 FirstCash with a short position of Brookfield Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Brookfield Corp.
Diversification Opportunities for FirstCash and Brookfield Corp
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FirstCash and Brookfield is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Brookfield Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Corp and FirstCash 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 FirstCash are associated (or correlated) with Brookfield Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Corp has no effect on the direction of FirstCash i.e., FirstCash and Brookfield Corp go up and down completely randomly.
Pair Corralation between FirstCash and Brookfield Corp
Given the investment horizon of 90 days FirstCash is expected to under-perform the Brookfield Corp. In addition to that, FirstCash is 1.15 times more volatile than Brookfield Corp. It trades about 0.0 of its total potential returns per unit of risk. Brookfield Corp is currently generating about 0.03 per unit of volatility. If you would invest 5,877 in Brookfield Corp on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Brookfield Corp or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstCash vs. Brookfield Corp
Performance |
| Timeline |
| FirstCash |
| Brookfield Corp |
FirstCash and Brookfield Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Brookfield Corp
The main advantage of trading using opposite FirstCash and Brookfield Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Brookfield Corp 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 Corp will offset losses from the drop in Brookfield Corp's long position.| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash vs. Medallion Financial Corp |
| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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