Correlation Between Mount Logan and Brookfield Business
Can any of the company-specific risk be diversified away by investing in both Mount Logan 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 Mount Logan and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Logan Capital and Brookfield Business Corp, you can compare the effects of market volatilities on Mount Logan 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 Mount Logan with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Logan and Brookfield Business.
Diversification Opportunities for Mount Logan and Brookfield Business
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mount and Brookfield is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mount Logan Capital 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 Mount Logan 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 Mount Logan Capital 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 Mount Logan i.e., Mount Logan and Brookfield Business go up and down completely randomly.
Pair Corralation between Mount Logan and Brookfield Business
Assuming the 90 days horizon Mount Logan Capital is expected to under-perform the Brookfield Business. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mount Logan Capital is 4.53 times less risky than Brookfield Business. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Brookfield Business Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,008 in Brookfield Business Corp on September 2, 2024 and sell it today you would earn a total of 751.00 from holding Brookfield Business Corp or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mount Logan Capital vs. Brookfield Business Corp
Performance |
| Timeline |
| Mount Logan Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Brookfield Business Corp |
Mount Logan and Brookfield Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Logan and Brookfield Business
The main advantage of trading using opposite Mount Logan and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Logan 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.| Mount Logan vs. Guardian Capital Group | Mount Logan vs. Flow Capital Corp | Mount Logan vs. Blackhawk Growth Corp | Mount Logan vs. Urbana |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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