Correlation Between Braille Energy and Brookfield

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

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

Diversification Opportunities for Braille Energy and Brookfield

-0.36

Correlation Coefficient

Braille Energy  Brookfield

Very good diversification

The 3 months correlation between Braille and Brookfield is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Braille Energy Systems and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Braille Energy 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 Braille Energy Systems are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Braille Energy i.e., Braille Energy and Brookfield go up and down completely randomly.

Pair Corralation between Braille Energy and Brookfield

Assuming the 90 days horizon Braille Energy Systems is expected to under-perform the Brookfield. In addition to that, Braille Energy is 8.02 times more volatile than Brookfield. It trades about -0.03 of its total potential returns per unit of risk. Brookfield is currently generating about 0.08 per unit of volatility. If you would invest  2,310  in Brookfield on September 15, 2024 and sell it today you would earn a total of  82.00  from holding Brookfield or generate 3.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Braille Energy Systems  vs.  Brookfield

Braille Energy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braille Energy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Brookfield

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Brookfield is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Braille Energy and Brookfield

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

The idea behind Braille Energy Systems and Brookfield 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 CEOs Directory module to screen CEOs from public companies around the world.