Correlation Between Brookfield Corp and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and Gladstone Investment 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 Corp and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and Gladstone Investment, you can compare the effects of market volatilities on Brookfield Corp and Gladstone Investment 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 Corp with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and Gladstone Investment.
Diversification Opportunities for Brookfield Corp and Gladstone Investment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Gladstone is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Brookfield Corp 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 Corp are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Gladstone Investment go up and down completely randomly.
Pair Corralation between Brookfield Corp and Gladstone Investment
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 2.31 times more return on investment than Gladstone Investment. However, Brookfield Corp is 2.31 times more volatile than Gladstone Investment. It trades about 0.08 of its potential returns per unit of risk. Gladstone Investment is currently generating about -0.03 per unit of risk. If you would invest 5,308 in Brookfield Corp on September 30, 2024 and sell it today you would earn a total of 411.00 from holding Brookfield Corp or generate 7.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Brookfield Corp vs. Gladstone Investment
Performance |
Timeline |
Brookfield Corp |
Gladstone Investment |
Brookfield Corp and Gladstone Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brookfield Corp and Gladstone Investment
The main advantage of trading using opposite Brookfield Corp and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.Brookfield Corp vs. Aquagold International | ||
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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