Correlation Between Aya Gold and Brookfield Business

Can any of the company-specific risk be diversified away by investing in both Aya Gold and Brookfield Business 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 Aya Gold and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aya Gold Silver and Brookfield Business Corp, you can compare the effects of market volatilities on Aya Gold and Brookfield Business 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 Aya Gold with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aya Gold and Brookfield Business.

Diversification Opportunities for Aya Gold and Brookfield Business

-0.32

Correlation Coefficient

Aya Gold  Brookfield Business

Very good diversification

The 3 months correlation between Aya and Brookfield is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aya Gold Silver and Brookfield Business Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business Corp and Aya Gold 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 Aya Gold Silver are associated (or correlated) with Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business Corp has no effect on the direction of Aya Gold i.e., Aya Gold and Brookfield Business go up and down completely randomly.

Pair Corralation between Aya Gold and Brookfield Business

Assuming the 90 days trading horizon Aya Gold Silver is expected to generate 1.15 times more return on investment than Brookfield Business. However, Aya Gold is 1.15 times more volatile than Brookfield Business Corp. It trades about -0.15 of its potential returns per unit of risk. Brookfield Business Corp is currently generating about -0.19 per unit of risk. If you would invest  1,280  in Aya Gold Silver on October 11, 2024 and sell it today you would lose (118.00) from holding Aya Gold Silver or give up 9.22% of portfolio value over 90 days.

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

Aya Gold Silver  vs.  Brookfield Business Corp

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Brookfield Business Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brookfield Business Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Brookfield Business is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aya Gold and Brookfield Business

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

The idea behind Aya Gold Silver and Brookfield Business Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..