Correlation Between Brookfield Real and Flaherty Crumrine

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

Diversification Opportunities for Brookfield Real and Flaherty Crumrine

0.45

Correlation Coefficient

Brookfield Real  Flaherty Crumrine

Very weak diversification

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

Pair Corralation between Brookfield Real and Flaherty Crumrine

Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to generate 0.88 times more return on investment than Flaherty Crumrine. However, Brookfield Real Assets is 1.14 times less risky than Flaherty Crumrine. It trades about 0.09 of its potential returns per unit of risk. Flaherty Crumrine Total is currently generating about 0.04 per unit of risk. If you would invest  1,311  in Brookfield Real Assets on September 12, 2024 and sell it today you would earn a total of  34.00  from holding Brookfield Real Assets or generate 2.59% 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.  Flaherty Crumrine Total

Brookfield Real Assets

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Real Assets are ranked lower than 7 (%) 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.

Flaherty Crumrine Total

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Total are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Flaherty Crumrine is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Brookfield Real and Flaherty Crumrine

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

The idea behind Brookfield Real Assets and Flaherty Crumrine Total 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.