Correlation Between Altagas Cum and Brompton Global

Can any of the company-specific risk be diversified away by investing in both Altagas Cum and Brompton Global 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 Altagas Cum and Brompton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altagas Cum Red and Brompton Global Dividend, you can compare the effects of market volatilities on Altagas Cum and Brompton Global 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 Altagas Cum with a short position of Brompton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and Brompton Global.

Diversification Opportunities for Altagas Cum and Brompton Global

-0.12

Correlation Coefficient

Altagas Cum  Brompton Global

Good diversification

The 3 months correlation between Altagas and Brompton is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and Brompton Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Global Dividend and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with Brompton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Global Dividend has no effect on the direction of Altagas Cum i.e., Altagas Cum and Brompton Global go up and down completely randomly.

Pair Corralation between Altagas Cum and Brompton Global

Assuming the 90 days trading horizon Altagas Cum is expected to generate 2.21 times less return on investment than Brompton Global. But when comparing it to its historical volatility, Altagas Cum Red is 1.02 times less risky than Brompton Global. It trades about 0.07 of its potential returns per unit of risk. Brompton Global Dividend is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,125  in Brompton Global Dividend on September 2, 2024 and sell it today you would earn a total of  152.00  from holding Brompton Global Dividend or generate 7.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Altagas Cum Red  vs.  Brompton Global Dividend

Altagas Cum Red

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Brompton Global Dividend

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Global Dividend are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Altagas Cum and Brompton Global

The main advantage of trading using opposite Altagas Cum and Brompton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, Brompton Global 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 Brompton Global will offset losses from the drop in Brompton Global's long position.

The idea behind Altagas Cum Red and Brompton Global Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.