Correlation Between Brookfield Business and Trisura

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

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

Diversification Opportunities for Brookfield Business and Trisura

-0.16

Correlation Coefficient

Brookfield Business  Trisura

Good diversification

The 3 months correlation between Brookfield and Trisura is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Partners and Trisura Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisura Group and Brookfield Business 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 Business Partners are associated (or correlated) with Trisura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisura Group has no effect on the direction of Brookfield Business i.e., Brookfield Business and Trisura go up and down completely randomly.

Pair Corralation between Brookfield Business and Trisura

Assuming the 90 days trading horizon Brookfield Business Partners is expected to generate 1.32 times more return on investment than Trisura. However, Brookfield Business is 1.32 times more volatile than Trisura Group. It trades about 0.18 of its potential returns per unit of risk. Trisura Group is currently generating about 0.0 per unit of risk. If you would invest  2,782  in Brookfield Business Partners on September 12, 2024 and sell it today you would earn a total of  749.00  from holding Brookfield Business Partners or generate 26.92% return on investment over 90 days.

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

Brookfield Business Partners  vs.  Trisura Group

Brookfield Business

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Business Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Brookfield Business sustained solid returns over the last few months and may actually be approaching a breakup point.

Trisura Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brookfield Business and Trisura

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

The idea behind Brookfield Business Partners and Trisura Group 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.