Correlation Between Brookfield Real and Capital Southwest
Can any of the company-specific risk be diversified away by investing in both Brookfield Real and Capital Southwest 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 Brookfield Real and Capital Southwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Real Assets and Capital Southwest, you can compare the effects of market volatilities on Brookfield Real and Capital Southwest 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 Brookfield Real with a short position of Capital Southwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and Capital Southwest.
Diversification Opportunities for Brookfield Real and Capital Southwest
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and Capital is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and Capital Southwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Southwest and Brookfield Real 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 Brookfield Real Assets are associated (or correlated) with Capital Southwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Southwest has no effect on the direction of Brookfield Real i.e., Brookfield Real and Capital Southwest go up and down completely randomly.
Pair Corralation between Brookfield Real and Capital Southwest
Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to generate 0.3 times more return on investment than Capital Southwest. However, Brookfield Real Assets is 3.38 times less risky than Capital Southwest. It trades about 0.07 of its potential returns per unit of risk. Capital Southwest is currently generating about -0.22 per unit of risk. If you would invest 1,333 in Brookfield Real Assets on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Brookfield Real Assets or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Real Assets vs. Capital Southwest
Performance |
| Timeline |
| Brookfield Real Assets |
| Capital Southwest |
Brookfield Real and Capital Southwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Real and Capital Southwest
The main advantage of trading using opposite Brookfield Real and Capital Southwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Real position performs unexpectedly, Capital Southwest 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 Capital Southwest will offset losses from the drop in Capital Southwest's long position.| Brookfield Real vs. Pimco Dynamic Income | Brookfield Real vs. Pimco Corporate Income | Brookfield Real vs. Cornerstone Strategic Value | Brookfield Real vs. Cornerstone Strategic Return |
| Capital Southwest vs. Oxford Lane Capital | Capital Southwest vs. XAI Octagon Floating | Capital Southwest vs. Cornerstone Strategic Return | Capital Southwest vs. Cornerstone Strategic Value |
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.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |