Correlation Between Brookfield Business and Canaccord Genuity

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

By analyzing existing cross correlation between Brookfield Business Corp and Canaccord Genuity Group, you can compare the effects of market volatilities on Brookfield Business and Canaccord Genuity 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 Canaccord Genuity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Canaccord Genuity.

Diversification Opportunities for Brookfield Business and Canaccord Genuity

0.74

Correlation Coefficient

Brookfield Business  Canaccord Genuity

Poor diversification

The 3 months correlation between Brookfield and Canaccord is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity 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 Corp are associated (or correlated) with Canaccord Genuity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaccord Genuity has no effect on the direction of Brookfield Business i.e., Brookfield Business and Canaccord Genuity go up and down completely randomly.

Pair Corralation between Brookfield Business and Canaccord Genuity

Assuming the 90 days trading horizon Brookfield Business Corp is expected to generate 1.31 times more return on investment than Canaccord Genuity. However, Brookfield Business is 1.31 times more volatile than Canaccord Genuity Group. It trades about -0.01 of its potential returns per unit of risk. Canaccord Genuity Group is currently generating about -0.15 per unit of risk. If you would invest  3,387  in Brookfield Business Corp on October 23, 2024 and sell it today you would lose (33.00) from holding Brookfield Business Corp or give up 0.97% of portfolio value over 90 days.

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

Brookfield Business Corp  vs.  Canaccord Genuity Group

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 recent stock price disarray, may contribute to short-term losses for the investors.

Canaccord Genuity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brookfield Business and Canaccord Genuity

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

The idea behind Brookfield Business Corp and Canaccord Genuity 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.