Correlation Between Brookfield Real and Elysee Development

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

By analyzing existing cross correlation between Brookfield Real Assets and Elysee Development Corp, you can compare the effects of market volatilities on Brookfield Real and Elysee Development 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 Real with a short position of Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and Elysee Development.

Diversification Opportunities for Brookfield Real and Elysee Development

-0.23

Correlation Coefficient

Brookfield Real  Elysee Development

Very good diversification

The 3 months correlation between Brookfield and Elysee is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp and Brookfield Real 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 Real Assets are associated (or correlated) with Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of Brookfield Real i.e., Brookfield Real and Elysee Development go up and down completely randomly.

Pair Corralation between Brookfield Real and Elysee Development

Allowing for the 90-day total investment horizon Brookfield Real is expected to generate 1.84 times less return on investment than Elysee Development. But when comparing it to its historical volatility, Brookfield Real Assets is 11.45 times less risky than Elysee Development. It trades about 0.12 of its potential returns per unit of risk. Elysee Development Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Elysee Development Corp on October 5, 2024 and sell it today you would lose (4.00) from holding Elysee Development Corp or give up 16.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.38%
Values	Daily Returns

Brookfield Real Assets  vs.  Elysee Development Corp

Brookfield Real Assets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Real Assets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Brookfield Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Elysee Development Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elysee Development Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Brookfield Real and Elysee Development

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

The idea behind Brookfield Real Assets and Elysee Development Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.