Correlation Between Western Asset and Brookfield Real
Can any of the company-specific risk be diversified away by investing in both Western Asset and Brookfield Real 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 Western Asset and Brookfield Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Brookfield Real Assets, you can compare the effects of market volatilities on Western Asset and Brookfield Real 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 Western Asset with a short position of Brookfield Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Brookfield Real.
Diversification Opportunities for Western Asset and Brookfield Real
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Brookfield is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Brookfield Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Real Assets and Western Asset 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 Western Asset High are associated (or correlated) with Brookfield Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Real Assets has no effect on the direction of Western Asset i.e., Western Asset and Brookfield Real go up and down completely randomly.
Pair Corralation between Western Asset and Brookfield Real
Considering the 90-day investment horizon Western Asset is expected to generate 5.15 times less return on investment than Brookfield Real. In addition to that, Western Asset is 1.69 times more volatile than Brookfield Real Assets. It trades about 0.01 of its total potential returns per unit of risk. Brookfield Real Assets is currently generating about 0.13 per unit of volatility. If you would invest 1,141 in Brookfield Real Assets on September 12, 2024 and sell it today you would earn a total of 204.00 from holding Brookfield Real Assets or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Brookfield Real Assets
Performance |
| Timeline |
| Western Asset High |
| Brookfield Real Assets |
Western Asset and Brookfield Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Brookfield Real
The main advantage of trading using opposite Western Asset and Brookfield Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Brookfield Real 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 Real will offset losses from the drop in Brookfield Real's long position.| Western Asset vs. Oxford Lane Capital | Western Asset vs. Orchid Island Capital | Western Asset vs. Guggenheim Strategic Opportunities | Western Asset vs. Stone Harbor Emerging |
| Brookfield Real vs. Pimco Dynamic Income | Brookfield Real vs. Pimco Corporate Income | Brookfield Real vs. Cornerstone Strategic Value | Brookfield Real vs. Cornerstone Strategic Return |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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