Correlation Between DelphX Capital and Brookfield Business

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

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

Diversification Opportunities for DelphX Capital and Brookfield Business

-0.42

Correlation Coefficient

DelphX Capital  Brookfield Business

Very good diversification

The 3 months correlation between DelphX and Brookfield is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DelphX Capital Markets and Brookfield Business Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business and DelphX Capital 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 DelphX Capital Markets are associated (or correlated) with Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business has no effect on the direction of DelphX Capital i.e., DelphX Capital and Brookfield Business go up and down completely randomly.

Pair Corralation between DelphX Capital and Brookfield Business

Assuming the 90 days trading horizon DelphX Capital Markets is expected to under-perform the Brookfield Business. In addition to that, DelphX Capital is 4.14 times more volatile than Brookfield Business Partners. It trades about -0.07 of its total potential returns per unit of risk. Brookfield Business Partners is currently generating about -0.03 per unit of volatility. If you would invest  3,635  in Brookfield Business Partners on December 4, 2024 and sell it today you would lose (142.00) from holding Brookfield Business Partners or give up 3.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DelphX Capital Markets  vs.  Brookfield Business Partners

DelphX Capital Markets

Risk-Adjusted Performance

Very Weak

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

Brookfield Business

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Business Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brookfield Business is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DelphX Capital and Brookfield Business

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

The idea behind DelphX Capital Markets and Brookfield Business Partners 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.