Correlation Between Guardian Capital and Brookfield Business
Can any of the company-specific risk be diversified away by investing in both Guardian Capital 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 Guardian Capital and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Capital Group and Brookfield Business Corp, you can compare the effects of market volatilities on Guardian Capital 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 Guardian Capital with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and Brookfield Business.
Diversification Opportunities for Guardian Capital and Brookfield Business
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardian and Brookfield is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group 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 Guardian Capital 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 Guardian Capital Group 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 Guardian Capital i.e., Guardian Capital and Brookfield Business go up and down completely randomly.
Pair Corralation between Guardian Capital and Brookfield Business
Assuming the 90 days horizon Guardian Capital is expected to generate 11.48 times less return on investment than Brookfield Business. But when comparing it to its historical volatility, Guardian Capital Group is 4.25 times less risky than Brookfield Business. It trades about 0.12 of its potential returns per unit of risk. Brookfield Business Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,395 in Brookfield Business Corp on September 2, 2024 and sell it today you would earn a total of 364.00 from holding Brookfield Business Corp or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guardian Capital Group vs. Brookfield Business Corp
Performance |
| Timeline |
| Guardian Capital |
| Brookfield Business Corp |
Guardian Capital and Brookfield Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Capital and Brookfield Business
The main advantage of trading using opposite Guardian Capital and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital 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.| Guardian Capital vs. Flow Capital Corp | Guardian Capital vs. Blackhawk Growth Corp | Guardian Capital vs. Urbana | Guardian Capital vs. Princeton Capital |
| 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |