Correlation Between Virtus Global and Brookfield Global

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

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

Diversification Opportunities for Virtus Global and Brookfield Global

0.91

Correlation Coefficient

Virtus Global  Brookfield Global

Almost no diversification

The 3 months correlation between Virtus and Brookfield is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Infrastructure and Brookfield Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Global Listed and Virtus Global 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 Virtus Global Infrastructure are associated (or correlated) with Brookfield Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Global Listed has no effect on the direction of Virtus Global i.e., Virtus Global and Brookfield Global go up and down completely randomly.

Pair Corralation between Virtus Global and Brookfield Global

Assuming the 90 days horizon Virtus Global is expected to generate 1.16 times less return on investment than Brookfield Global. But when comparing it to its historical volatility, Virtus Global Infrastructure is 1.04 times less risky than Brookfield Global. It trades about 0.07 of its potential returns per unit of risk. Brookfield Global Listed is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,366  in Brookfield Global Listed on September 7, 2024 and sell it today you would earn a total of  38.00  from holding Brookfield Global Listed or generate 2.78% return on investment over 90 days.

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

Virtus Global Infrastructure  vs.  Brookfield Global Listed

Virtus Global Infras

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Infrastructure are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Virtus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brookfield Global Listed

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Global Listed are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Brookfield Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Global and Brookfield Global

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

The idea behind Virtus Global Infrastructure and Brookfield Global Listed 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.