Correlation Between Brookfield Real and XAI Octagon

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

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

Diversification Opportunities for Brookfield Real and XAI Octagon

0.17

Correlation Coefficient

Brookfield Real  XAI Octagon

Average diversification

The 3 months correlation between Brookfield and XAI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and XAI Octagon Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAI Octagon Floating and Brookfield Real 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 Real Assets are associated (or correlated) with XAI Octagon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAI Octagon Floating has no effect on the direction of Brookfield Real i.e., Brookfield Real and XAI Octagon go up and down completely randomly.

Pair Corralation between Brookfield Real and XAI Octagon

Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to under-perform the XAI Octagon. In addition to that, Brookfield Real is 1.57 times more volatile than XAI Octagon Floating. It trades about 0.0 of its total potential returns per unit of risk. XAI Octagon Floating is currently generating about 0.1 per unit of volatility. If you would invest  530.00  in XAI Octagon Floating on August 31, 2024 and sell it today you would earn a total of  175.00  from holding XAI Octagon Floating or generate 33.02% return on investment over 90 days.

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

Brookfield Real Assets  vs.  XAI Octagon Floating

Brookfield Real Assets

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Real Assets are ranked lower than 12 (%) 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 recent stock price disturbance, may contribute to short-term losses for the investors.

XAI Octagon Floating

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in XAI Octagon Floating are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, XAI Octagon is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brookfield Real and XAI Octagon

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

The idea behind Brookfield Real Assets and XAI Octagon Floating 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.