Correlation Between Brookfield Asset and Fortis Srs

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

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

Diversification Opportunities for Brookfield Asset and Fortis Srs

0.63

Correlation Coefficient

Brookfield Asset  Fortis Srs

Poor diversification

The 3 months correlation between Brookfield and Fortis is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Fortis Srs J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Srs J and Brookfield Asset 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 Asset Management are associated (or correlated) with Fortis Srs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Srs J has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Fortis Srs go up and down completely randomly.

Pair Corralation between Brookfield Asset and Fortis Srs

Assuming the 90 days trading horizon Brookfield Asset is expected to generate 2.34 times less return on investment than Fortis Srs. But when comparing it to its historical volatility, Brookfield Asset Management is 1.18 times less risky than Fortis Srs. It trades about 0.06 of its potential returns per unit of risk. Fortis Srs J is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,997  in Fortis Srs J on December 2, 2024 and sell it today you would earn a total of  120.00  from holding Fortis Srs J or generate 6.01% return on investment over 90 days.

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

Brookfield Asset Management  vs.  Fortis Srs J

Brookfield Asset Man

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Brookfield Asset is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Fortis Srs J

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortis Srs J are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fortis Srs is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brookfield Asset and Fortis Srs

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

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