Correlation Between Brookfield Business and Nuveen Global

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

Diversification Opportunities for Brookfield Business and Nuveen Global

0.81

Correlation Coefficient

Brookfield Business  Nuveen Global

Very poor diversification

The 3 months correlation between Brookfield and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and Nuveen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Global High 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 Nuveen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Global High has no effect on the direction of Brookfield Business i.e., Brookfield Business and Nuveen Global go up and down completely randomly.

Pair Corralation between Brookfield Business and Nuveen Global

Given the investment horizon of 90 days Brookfield Business Corp is expected to generate 3.74 times more return on investment than Nuveen Global. However, Brookfield Business is 3.74 times more volatile than Nuveen Global High. It trades about 0.16 of its potential returns per unit of risk. Nuveen Global High is currently generating about 0.15 per unit of risk. If you would invest  2,234  in Brookfield Business Corp on September 13, 2024 and sell it today you would earn a total of  466.00  from holding Brookfield Business Corp or generate 20.86% return on investment over 90 days.

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

Brookfield Business Corp  vs.  Nuveen Global High

Brookfield Business Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Business Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Brookfield Business exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Global High

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Global High are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Nuveen Global is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Brookfield Business and Nuveen Global

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

The idea behind Brookfield Business Corp and Nuveen Global High 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.