Correlation Between BlackRock and Brookfield Asset

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

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

Diversification Opportunities for BlackRock and Brookfield Asset

0.0

Correlation Coefficient

BlackRock  Brookfield Asset

Pay attention - limited upside

The 3 months correlation between BlackRock and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and BlackRock 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 BlackRock are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of BlackRock i.e., BlackRock and Brookfield Asset go up and down completely randomly.

Pair Corralation between BlackRock and Brookfield Asset

If you would invest  94,439  in BlackRock on October 8, 2024 and sell it today you would earn a total of  7,644  from holding BlackRock or generate 8.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

BlackRock  vs.  Brookfield Asset Management

BlackRock

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Brookfield Asset Man

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with BlackRock and Brookfield Asset

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

The idea behind BlackRock and Brookfield Asset Management 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.