Correlation Between Brookfield Real and BlackRock Floating

Can any of the company-specific risk be diversified away by investing in both Brookfield Real and BlackRock Floating 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 BlackRock Floating 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 BlackRock Floating Rate, you can compare the effects of market volatilities on Brookfield Real and BlackRock Floating 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 BlackRock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and BlackRock Floating.

Diversification Opportunities for Brookfield Real and BlackRock Floating

0.45

Correlation Coefficient

Brookfield Real  BlackRock Floating

Very weak diversification

The 3 months correlation between Brookfield and BlackRock is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate 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 BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of Brookfield Real i.e., Brookfield Real and BlackRock Floating go up and down completely randomly.

Pair Corralation between Brookfield Real and BlackRock Floating

Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to generate 0.7 times more return on investment than BlackRock Floating. However, Brookfield Real Assets is 1.43 times less risky than BlackRock Floating. It trades about 0.07 of its potential returns per unit of risk. BlackRock Floating Rate is currently generating about -0.02 per unit of risk. If you would invest  1,298  in Brookfield Real Assets on December 29, 2024 and sell it today you would earn a total of  21.00  from holding Brookfield Real Assets or generate 1.62% return on investment over 90 days.

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

Brookfield Real Assets  vs.  BlackRock Floating Rate

Brookfield Real Assets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Real Assets are ranked lower than 5 (%) 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.

BlackRock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BlackRock Floating is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brookfield Real and BlackRock Floating

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

The idea behind Brookfield Real Assets and BlackRock Floating Rate 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.