Correlation Between Brookfield Asset and Slam Exploration

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

Diversification Opportunities for Brookfield Asset and Slam Exploration

0.11

Correlation Coefficient

Brookfield Asset  Slam Exploration

Average diversification

The 3 months correlation between Brookfield and Slam is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Slam Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slam Exploration 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 Slam Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slam Exploration has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Slam Exploration go up and down completely randomly.

Pair Corralation between Brookfield Asset and Slam Exploration

Assuming the 90 days trading horizon Brookfield Asset Management is expected to generate 0.06 times more return on investment than Slam Exploration. However, Brookfield Asset Management is 16.18 times less risky than Slam Exploration. It trades about 0.24 of its potential returns per unit of risk. Slam Exploration is currently generating about 0.01 per unit of risk. If you would invest  1,129  in Brookfield Asset Management on September 23, 2024 and sell it today you would earn a total of  96.00  from holding Brookfield Asset Management or generate 8.5% return on investment over 90 days.

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

Brookfield Asset Management  vs.  Slam Exploration

Brookfield Asset Man

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 11 (%) 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.

Slam Exploration

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Slam Exploration are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Slam Exploration showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Asset and Slam Exploration

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

The idea behind Brookfield Asset Management and Slam Exploration 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.