Correlation Between Brookfield Corp and Apollo Commercial

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

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

Diversification Opportunities for Brookfield Corp and Apollo Commercial

-0.49

Correlation Coefficient

Brookfield Corp  Apollo Commercial

Very good diversification

The 3 months correlation between Brookfield and Apollo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Apollo Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Commercial Real and Brookfield Corp 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 Corp are associated (or correlated) with Apollo Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Commercial Real has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Apollo Commercial go up and down completely randomly.

Pair Corralation between Brookfield Corp and Apollo Commercial

Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 1.06 times more return on investment than Apollo Commercial. However, Brookfield Corp is 1.06 times more volatile than Apollo Commercial Real. It trades about 0.29 of its potential returns per unit of risk. Apollo Commercial Real is currently generating about -0.08 per unit of risk. If you would invest  4,742  in Brookfield Corp on September 4, 2024 and sell it today you would earn a total of  1,409  from holding Brookfield Corp or generate 29.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Brookfield Corp  vs.  Apollo Commercial Real

Brookfield Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brookfield Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Apollo Commercial Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Commercial Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Brookfield Corp and Apollo Commercial

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

The idea behind Brookfield Corp and Apollo Commercial Real 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.