Correlation Between Xtract One and Brookfield Investments
Can any of the company-specific risk be diversified away by investing in both Xtract One and Brookfield Investments 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 Xtract One and Brookfield Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Brookfield Investments, you can compare the effects of market volatilities on Xtract One and Brookfield Investments 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 Xtract One with a short position of Brookfield Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Brookfield Investments.
Diversification Opportunities for Xtract One and Brookfield Investments
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtract and Brookfield is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments and Xtract One 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 Xtract One Technologies are associated (or correlated) with Brookfield Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of Xtract One i.e., Xtract One and Brookfield Investments go up and down completely randomly.
Pair Corralation between Xtract One and Brookfield Investments
Assuming the 90 days trading horizon Xtract One Technologies is expected to generate 10.35 times more return on investment than Brookfield Investments. However, Xtract One is 10.35 times more volatile than Brookfield Investments. It trades about 0.03 of its potential returns per unit of risk. Brookfield Investments is currently generating about 0.0 per unit of risk. If you would invest 56.00 in Xtract One Technologies on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Xtract One Technologies or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.2% |
| Values | Daily Returns |
Xtract One Technologies vs. Brookfield Investments
Performance |
| Timeline |
| Xtract One Technologies |
| Brookfield Investments |
Xtract One and Brookfield Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Brookfield Investments
The main advantage of trading using opposite Xtract One and Brookfield Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One position performs unexpectedly, Brookfield Investments 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 Investments will offset losses from the drop in Brookfield Investments' long position.| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
| Brookfield Investments vs. Data Communications Management | Brookfield Investments vs. Perseus Mining | Brookfield Investments vs. NeXGold Mining Corp | Brookfield Investments vs. Queens Road Capital |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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