Correlation Between Plata Latina and Brookfield Investments

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Can any of the company-specific risk be diversified away by investing in both Plata Latina and Brookfield Investments 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 Plata Latina and Brookfield Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plata Latina Minerals and Brookfield Investments, you can compare the effects of market volatilities on Plata Latina and Brookfield Investments 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 Plata Latina with a short position of Brookfield Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plata Latina and Brookfield Investments.

Diversification Opportunities for Plata Latina and Brookfield Investments

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between Plata and Brookfield is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Plata Latina Minerals and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments and Plata Latina 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 Plata Latina Minerals are associated (or correlated) with Brookfield Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of Plata Latina i.e., Plata Latina and Brookfield Investments go up and down completely randomly.

Pair Corralation between Plata Latina and Brookfield Investments

Assuming the 90 days horizon Plata Latina Minerals is expected to generate 49.64 times more return on investment than Brookfield Investments. However, Plata Latina is 49.64 times more volatile than Brookfield Investments. It trades about 0.1 of its potential returns per unit of risk. Brookfield Investments is currently generating about -0.04 per unit of risk. If you would invest  1.00  in Plata Latina Minerals on November 1, 2024 and sell it today you would earn a total of  0.00  from holding Plata Latina Minerals or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy55.74%
ValuesDaily Returns

Plata Latina Minerals  vs.  Brookfield Investments

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 020406080100
JavaScript chart by amCharts 3.21.15PLA BRN-PA
       Timeline  
Plata Latina Minerals 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Plata Latina Minerals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Plata Latina showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.010.0120.0140.0160.0180.02
Brookfield Investments 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Brookfield Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brookfield Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15SepOctNovDecJanOctNovDecJan24.824.92525.125.225.325.425.525.6

Plata Latina and Brookfield Investments Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-85.43-63.98-42.54-21.090.021.944.5667.2289.88112.54 0.20.40.60.81.01.21.4
JavaScript chart by amCharts 3.21.15PLA BRN-PA
       Returns  

Pair Trading with Plata Latina and Brookfield Investments

The main advantage of trading using opposite Plata Latina and Brookfield Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plata Latina position performs unexpectedly, Brookfield Investments 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 Investments will offset losses from the drop in Brookfield Investments' long position.
The idea behind Plata Latina Minerals and Brookfield Investments 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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