Correlation Between Brookfield Real and CBH

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

Diversification Opportunities for Brookfield Real and CBH

0.31

Correlation Coefficient

Brookfield Real  CBH

Weak diversification

The 3 months correlation between Brookfield and CBH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Brookfield Real i.e., Brookfield Real and CBH go up and down completely randomly.

Pair Corralation between Brookfield Real and CBH

If you would invest  1,320  in Brookfield Real Assets on September 18, 2024 and sell it today you would earn a total of  13.00  from holding Brookfield Real Assets or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Brookfield Real Assets  vs.  CBH

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.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Brookfield Real and CBH

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

The idea behind Brookfield Real Assets and CBH 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.