Correlation Between Canaccord Genuity and Brookfield Asset

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

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

Diversification Opportunities for Canaccord Genuity and Brookfield Asset

0.67

Correlation Coefficient

Canaccord Genuity  Brookfield Asset

Poor diversification

The 3 months correlation between Canaccord and Brookfield is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canaccord Genuity Group and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and Canaccord Genuity 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 Canaccord Genuity Group are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Canaccord Genuity i.e., Canaccord Genuity and Brookfield Asset go up and down completely randomly.

Pair Corralation between Canaccord Genuity and Brookfield Asset

Assuming the 90 days horizon Canaccord Genuity Group is expected to generate 2.81 times more return on investment than Brookfield Asset. However, Canaccord Genuity is 2.81 times more volatile than Brookfield Asset Management. It trades about 0.23 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.22 per unit of risk. If you would invest  838.00  in Canaccord Genuity Group on September 14, 2024 and sell it today you would earn a total of  241.00  from holding Canaccord Genuity Group or generate 28.76% return on investment over 90 days.

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

Canaccord Genuity Group  vs.  Brookfield Asset Management

Canaccord Genuity

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canaccord Genuity Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Canaccord Genuity displayed solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Asset Man

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 17 (%) 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.

Pair Trading with Canaccord Genuity and Brookfield Asset

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

The idea behind Canaccord Genuity Group and Brookfield Asset Management 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.