Correlation Between Xtract One and Brookfield Asset

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

By analyzing existing cross correlation between Xtract One Technologies and Brookfield Asset Management, you can compare the effects of market volatilities on Xtract One and Brookfield Asset 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 Xtract One with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Brookfield Asset.

Diversification Opportunities for Xtract One and Brookfield Asset

-0.77

Correlation Coefficient

Xtract One  Brookfield Asset

Pay attention - limited upside

The 3 months correlation between Xtract and Brookfield is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and Xtract One 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 Xtract One Technologies are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Xtract One i.e., Xtract One and Brookfield Asset go up and down completely randomly.

Pair Corralation between Xtract One and Brookfield Asset

Assuming the 90 days trading horizon Xtract One Technologies is expected to generate 4.01 times more return on investment than Brookfield Asset. However, Xtract One is 4.01 times more volatile than Brookfield Asset Management. It trades about 0.01 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.03 per unit of risk. If you would invest  51.00  in Xtract One Technologies on September 24, 2024 and sell it today you would lose (5.00) from holding Xtract One Technologies or give up 9.8% of portfolio value over 90 days.

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

Xtract One Technologies  vs.  Brookfield Asset Management

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Brookfield Asset Man

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Brookfield Asset may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Xtract One and Brookfield Asset

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

The idea behind Xtract One Technologies and Brookfield Asset Management 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.