Correlation Between Brookfield Asset and Western Asset

Can any of the company-specific risk be diversified away by investing in both Brookfield Asset 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 Asset 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 Asset Management and Western Asset Municipal, you can compare the effects of market volatilities on Brookfield Asset 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 Asset with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Western Asset.

Diversification Opportunities for Brookfield Asset and Western Asset

0.0

Correlation Coefficient

Brookfield Asset  Western Asset

Pay attention - limited upside

The 3 months correlation between Brookfield and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Brookfield Asset 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 Asset Management 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 Municipal has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Western Asset go up and down completely randomly.

Pair Corralation between Brookfield Asset and Western Asset

If you would invest  669.00  in Western Asset Municipal on December 21, 2024 and sell it today you would earn a total of  95.00  from holding Western Asset Municipal or generate 14.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brookfield Asset Management  vs.  Western Asset Municipal

Brookfield Asset Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Brookfield Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Western Asset Municipal

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Municipal are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly uncertain technical indicators, Western Asset reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Asset and Western Asset

The main advantage of trading using opposite Brookfield Asset and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset 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.

The idea behind Brookfield Asset Management and Western Asset Municipal 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..