Correlation Between Brookfield Real and Western Asset
Can any of the company-specific risk be diversified away by investing in both Brookfield Real and Western Asset 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 Western Asset 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 Western Asset Claymore, you can compare the effects of market volatilities on Brookfield Real and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and Western Asset.
Diversification Opportunities for Brookfield Real and Western Asset
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Western is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and Western Asset Claymore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Claymore 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Claymore has no effect on the direction of Brookfield Real i.e., Brookfield Real and Western Asset go up and down completely randomly.
Pair Corralation between Brookfield Real and Western Asset
Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to generate 1.09 times more return on investment than Western Asset. However, Brookfield Real is 1.09 times more volatile than Western Asset Claymore. It trades about 0.24 of its potential returns per unit of risk. Western Asset Claymore is currently generating about 0.06 per unit of risk. If you would invest 1,323 in Brookfield Real Assets on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Brookfield Real Assets or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Real Assets vs. Western Asset Claymore
Performance |
| Timeline |
| Brookfield Real Assets |
| Western Asset Claymore |
Brookfield Real and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Real and Western Asset
The main advantage of trading using opposite Brookfield Real and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Real position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Brookfield Real Assets | Western Asset vs. Guggenheim Strategic Opportunities | Western Asset vs. Cornerstone Strategic Return | Western Asset 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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