Correlation Between Brookfield Asset and Artisan Partners

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

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

Diversification Opportunities for Brookfield Asset and Artisan Partners

0.91

Correlation Coefficient

Brookfield Asset  Artisan Partners

Almost no diversification

The 3 months correlation between Brookfield and Artisan is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Brookfield Asset 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 Asset Management are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Artisan Partners go up and down completely randomly.

Pair Corralation between Brookfield Asset and Artisan Partners

Considering the 90-day investment horizon Brookfield Asset Management is expected to generate 0.78 times more return on investment than Artisan Partners. However, Brookfield Asset Management is 1.29 times less risky than Artisan Partners. It trades about 0.38 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.16 per unit of risk. If you would invest  4,076  in Brookfield Asset Management on August 30, 2024 and sell it today you would earn a total of  1,650  from holding Brookfield Asset Management or generate 40.48% return on investment over 90 days.

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

Brookfield Asset Management  vs.  Artisan Partners Asset

Brookfield Asset Man

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Brookfield Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Artisan Partners Asset

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Artisan Partners displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Asset and Artisan Partners

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

The idea behind Brookfield Asset Management and Artisan Partners Asset 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..