Correlation Between Brookfield and Prosper Gold

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

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

Diversification Opportunities for Brookfield and Prosper Gold

-0.57

Correlation Coefficient

Brookfield  Prosper Gold

Excellent diversification

The 3 months correlation between Brookfield and Prosper is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield and Prosper Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosper Gold Corp and Brookfield 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 are associated (or correlated) with Prosper Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosper Gold Corp has no effect on the direction of Brookfield i.e., Brookfield and Prosper Gold go up and down completely randomly.

Pair Corralation between Brookfield and Prosper Gold

Assuming the 90 days trading horizon Brookfield is expected to generate 0.15 times more return on investment than Prosper Gold. However, Brookfield is 6.63 times less risky than Prosper Gold. It trades about 0.21 of its potential returns per unit of risk. Prosper Gold Corp is currently generating about -0.05 per unit of risk. If you would invest  2,257  in Brookfield on October 23, 2024 and sell it today you would earn a total of  193.00  from holding Brookfield or generate 8.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Brookfield  vs.  Prosper Gold Corp

Brookfield

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Brookfield may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Prosper Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosper Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Brookfield and Prosper Gold

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

The idea behind Brookfield and Prosper Gold Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.