Correlation Between Vontobel Holding and Brookfield Asset

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

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

Diversification Opportunities for Vontobel Holding and Brookfield Asset

0.0

Correlation Coefficient

Vontobel Holding  Brookfield Asset

Pay attention - limited upside

The 3 months correlation between Vontobel and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vontobel Holding AG 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 Vontobel Holding 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 Vontobel Holding AG 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 Vontobel Holding i.e., Vontobel Holding and Brookfield Asset go up and down completely randomly.

Pair Corralation between Vontobel Holding and Brookfield Asset

If you would invest  4,455  in Brookfield Asset Management on September 13, 2024 and sell it today you would earn a total of  1,452  from holding Brookfield Asset Management or generate 32.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Vontobel Holding AG  vs.  Brookfield Asset Management

Vontobel Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vontobel Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Vontobel Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Brookfield Asset Man

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brookfield Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vontobel Holding and Brookfield Asset

The main advantage of trading using opposite Vontobel Holding and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vontobel Holding 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 Vontobel Holding AG 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.