Correlation Between Brookfield Real and FAM
Can any of the company-specific risk be diversified away by investing in both Brookfield Real and FAM 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 FAM 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 FAM, you can compare the effects of market volatilities on Brookfield Real and FAM 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 FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and FAM.
Diversification Opportunities for Brookfield Real and FAM
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brookfield and FAM is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM 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 FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Brookfield Real i.e., Brookfield Real and FAM go up and down completely randomly.
Pair Corralation between Brookfield Real and FAM
If you would invest 1,333 in Brookfield Real Assets on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Brookfield Real Assets or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Brookfield Real Assets vs. FAM
Performance |
| Timeline |
| Brookfield Real Assets |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Brookfield Real and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Real and FAM
The main advantage of trading using opposite Brookfield Real and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Real position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM'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 |
| FAM vs. Brookfield Real Assets | FAM vs. Guggenheim Strategic Opportunities | FAM vs. Cornerstone Strategic Return | FAM 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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