Correlation Between Brookfield Corp and Cartesian Growth

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

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

Diversification Opportunities for Brookfield Corp and Cartesian Growth

0.05

Correlation Coefficient

Brookfield Corp  Cartesian Growth

Significant diversification

The 3 months correlation between Brookfield and Cartesian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Cartesian Growth go up and down completely randomly.

Pair Corralation between Brookfield Corp and Cartesian Growth

Allowing for the 90-day total investment horizon Brookfield Corp is expected to under-perform the Cartesian Growth. In addition to that, Brookfield Corp is 20.74 times more volatile than Cartesian Growth. It trades about -0.06 of its total potential returns per unit of risk. Cartesian Growth is currently generating about 0.08 per unit of volatility. If you would invest  1,163  in Cartesian Growth on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Cartesian Growth or generate 0.52% return on investment over 90 days.

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

Brookfield Corp  vs.  Cartesian Growth

Brookfield Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Cartesian Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cartesian Growth are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Cartesian Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brookfield Corp and Cartesian Growth

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

The idea behind Brookfield Corp and Cartesian Growth 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.