Correlation Between BlackRock Floating and Brookfield Real

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

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

Diversification Opportunities for BlackRock Floating and Brookfield Real

0.39

Correlation Coefficient

BlackRock Floating  Brookfield Real

Weak diversification

The 3 months correlation between BlackRock and Brookfield is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Floating Rate and Brookfield Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Real Assets and BlackRock Floating 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 BlackRock Floating Rate are associated (or correlated) with Brookfield Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Real Assets has no effect on the direction of BlackRock Floating i.e., BlackRock Floating and Brookfield Real go up and down completely randomly.

Pair Corralation between BlackRock Floating and Brookfield Real

Considering the 90-day investment horizon BlackRock Floating Rate is expected to generate 1.43 times more return on investment than Brookfield Real. However, BlackRock Floating is 1.43 times more volatile than Brookfield Real Assets. It trades about 0.18 of its potential returns per unit of risk. Brookfield Real Assets is currently generating about 0.17 per unit of risk. If you would invest  1,239  in BlackRock Floating Rate on September 4, 2024 and sell it today you would earn a total of  95.00  from holding BlackRock Floating Rate or generate 7.67% return on investment over 90 days.

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

BlackRock Floating Rate  vs.  Brookfield Real Assets

BlackRock Floating Rate

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Floating Rate are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, BlackRock Floating may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Brookfield Real Assets

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Real Assets are ranked lower than 13 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackRock Floating and Brookfield Real

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

The idea behind BlackRock Floating Rate and Brookfield Real Assets 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 Global Correlations module to find global opportunities by holding instruments from different markets.