Correlation Between Brookfield Real and Nuveen Global

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

Diversification Opportunities for Brookfield Real and Nuveen Global

0.87

Correlation Coefficient

Brookfield Real  Nuveen Global

Very poor diversification

The 3 months correlation between Brookfield and Nuveen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and Nuveen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Global High 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 Nuveen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Global High has no effect on the direction of Brookfield Real i.e., Brookfield Real and Nuveen Global go up and down completely randomly.

Pair Corralation between Brookfield Real and Nuveen Global

Allowing for the 90-day total investment horizon Brookfield Real is expected to generate 3.95 times less return on investment than Nuveen Global. In addition to that, Brookfield Real is 1.05 times more volatile than Nuveen Global High. It trades about 0.08 of its total potential returns per unit of risk. Nuveen Global High is currently generating about 0.34 per unit of volatility. If you would invest  1,266  in Nuveen Global High on December 2, 2024 and sell it today you would earn a total of  71.00  from holding Nuveen Global High or generate 5.61% return on investment over 90 days.

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

Brookfield Real Assets  vs.  Nuveen Global High

Brookfield Real Assets

Risk-Adjusted Performance

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.

Nuveen Global High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Global High are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Nuveen Global 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 Nuveen Global

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

The idea behind Brookfield Real Assets and Nuveen Global High 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.